Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 700 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).
Bullish Write Up of LyondellBasell
LyondellBasell Industries NV (NYSE:LYB) is the beneficiary of the Barron’s bounce today in the pre-market. Shares of the chemical maker are up in pre-market after the financial magazine published an article entitled, ‘LyondellBasell Stock Offers a 4.2% Yield and Upside’. In the article, the writer, Jack Hough, says that it’s time for bargain hunters to hit the buy button on the stock given LyondellBasell’s retracement from $100 to $80 and its $4.2% yield. Hough thinks LyondellBasell shares could deliver a total return of around 20% as the stock’s P/E ratio rises in line with its peers due to cost-efficiency initiatives and potentially higher crude prices, which confers onto LyondellBasell an advantage versus its international peers. Of the around 766 elite funds we track, 54 funds owned $2.36 billion worth of LyondellBasell Industries NV (NYSE:LYB)’s stock, which accounted for 6.40% of the float on March 31, versus 55 funds and $3.17 billion on December 31.
Electronic Arts Eager To Nurture Competition
Electronic Arts Inc. (NASDAQ:EA) is in the spotlight on Monday after the company announced plans over the weekend to create four EA tournaments focused on the company’s Madden football game that will have corporate sponsors and will televised similar to sporting or poker events. The four tournaments will have $1 million in prizes and will mark a major expansion for Electronic Arts in the arena of competitive gaming or e-sports. Madden is perhaps the best game for Electronic Arts Inc. (NASDAQ:EA) to feature seeing as the video game franchise has sold more than 100 million copies since its introduction. Stephen Mandel’s Lone Pine Capital was a large shareholder of Electronic Arts at the end of March.
On the next page, we examine DrReddy’s Laboratories, Allergan and Teva Pharmaceutical Industries.