Although the major indexes are relatively unchanged as the earnings results from Microsoft and other have failed to stir excitement in the broader market, traders are eagerly watching Coach Inc (NYSE:COH), Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB), MGP Ingredients Inc (NASDAQ:MGPI), Northwest Biotherapeutics, Inc (NASDAQ:NWBO), and Sonic Corporation (NASDAQ:SONC).
In this article, we analyze why each stock is trending and we will use data from the last round of 13F filings to assess the hedge fund sentiment towards them.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).
Coach Inc (NYSE:COH) is in the spotlight today after Betaville published an article stating that its sources say that the company is working with the investment bank Evercore on a potential $20 billion merger with Burberry. This was later contradicted by Reuters, whose sources say the two are not in active merger negotiations. Analysts, meanwhile, have chimed in, with one saying that the potential combination between the two would be a ‘merger of problems’. Dmitry Balyasny’s Balyasny Asset Management almost doubled its stake in Coach Inc (NYSE:COH) to 2.195 million shares during the second quarter.
Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) shares are 5% in the green after the restaurant chain released preliminary results for its fiscal third quarter. The company expects adjusted net income of $0.61 per share, versus the Street’s estimate of $0.49 per shar, while total revenues are seen at $297 million, with comparable restaurant sales declining by 3.6% year-over-year. In addition, the management revised its guidance for the full fiscal 2016, lowering adjusted EBITDA to an estimated range of $141 million to $145 million. Those numbers were evidently better than market expectations, which explains the rally. Out of the 749 top funds that we track, 15 owned shares of Red Robin Gourmet Burgers, Inc. (NASDAQ:RRGB) at the end of June, down 2 funds from the previous quarter.
On the next page, we examine MGP Ingredients, Northwest Biotherapeutics, and Sonic Corporation.