The US stock market slumped on Thursday, with the Dow Jones and S&P 500 down by around 0.5%. Various factors including impending slowdown of Chinese economy and possibility of federal reserve rate hike are weighing down the markets.
Apart from macro news, the markets are also driven by individual stocks, such as KBR Inc. (NYSE:KBR), Autohome Inc. (ADR) (NYSE:ATHM), Adaptimmune Therapeutics PLC – ADR (NASDAQ:ADAP), Embraer SA (ADR) (NYSE:ERJ), and Fiat Chrysler Automobiles NV (NYSE:FCAU). Let’s take a look at the news behind these stocks and assess the hedge fund sentiment towards them.
Hedge fund sentiment is an important metric for assessing long-term profitability. At Insider Monkey, we track over 740 hedge funds, whose quarterly 13F filings we analyze to 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 more details here).
KBR Inc. (NYSE:KBR) stock is trading down after it was downgrade by Goldman Sachs to ‘Sell’ from ‘Hold’. However, KBR also announced a new deal obtained by its JV with Triple Canopy, which inked Kuwait Base Operations and Security Support Services contract with the army. The contract is expected to be worth $800 million and to span over the course of five years. Among the funds we track, 24 funds held $416 million worth of KBR’s stock at the end of June, having amassed 22.10% of its outstanding stock, compared to 28 investors with $564 million in shares a quarter earlier.
Autohome Inc. (ADR) (NYSE:ATHM) stock is trading lower following news of the withdrawal of the privatization proposal made by a consortium in April this year. The consortium consisted of James Zhi Qin, Boyu Capital Advisory Co. Ltd, Hillhouse TBC Holdings L.P. and Sequoia China Investment Management LLP. The number of funds from our database long Autohome advanced to 14 from 11 during the second quarter, while the total value of their holdings increased to $96 million from $69 million.
On the next page, we are going to discuss the news surrounding Adaptimmune Therapeutics, Embraer, and Fiat Chrysler Automobiles.