We believe that imitating hedge funds and other large institutional investors can be helpful in identifying stocks capable of outperforming the broader market. Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).
Analyst Questions Rio Tinto’s Projections for Mine
Rio Tinto plc (ADR) (NYSE:RIO) is in the spotlight after analysts at Bernstein Research said that the company’s projected return from its $5.3 billion dollar development of the Oyu Tolgoi mine is overstated. Rio Tinto projects an internal rate of return (IRR) of around 20% for the underground copper and gold mine in Mongolia, while analysts at Bernstein point out that the company faces substantial technical and execution risks that could lead to cost over-runs. Whether the IRR for the mine is 20% or not, Rio Tinto plc (ADR) (NYSE:RIO)’s fortunes are more dependent on commodity prices, which have inched higher of late. Of the 766 active funds that we track, 24 of them owned $280.96 million in Rio Tinto plc (ADR) (NYSE:RIO) positions as of the latest 13F reporting period. Rio shares are down by 2% in pre-market trading.
Potential Merger in the Healthcare Sector
According to the Wall Street Journal, Amsurg Corp (NASDAQ:AMSG) is in talks with Envision Healthcare Holdings Inc (NYSE:EVHC) about a potential merger. The companies are in advanced talks, and a merger deal could be announced as soon as next week. Seeing as both companies provide healthcare services, the combination of the two could yield significant synergies. There is no guarantee of a deal, however. Amsurg Corp (NASDAQ:AMSG) has been an industry consolidator over the past five years and its stock is up by 2.5% year-to-date. 32 funds in our database owned shares of Envision Healthcare Holdings Inc (NYSE:EVHC) on March 31, while 27 were long Amsurg.
On the next page we examine why Restoration Hardware Holdings and Apple Inc have investors’ attention this morning.