With the bulk of the meaningful earnings reports by major companies in the rear-view mirror, volatility is low on Wall Street. The VIX is trading around 15.8 while the major indexes are relatively calm.
In this article, we take a closer look at five companies whose shares are moving far more than the broader market, Lifelock Inc (NYSE:LOCK), Archer Daniels Midland Company (NYSE:ADM), Bunge Ltd (NYSE:BG), Goldcorp Inc. (USA) (NYSE:GG), and Barrick Gold Corporation (USA) (NYSE:ABX). We also examine how elite funds were positioned among the stocks using 13F filing data.
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).
Lifelock Inc (NYSE:LOCK) shares have popped 8% after Bloomberg reported that the company is said to be in talks with various institutions, including TPG, about potentially going private through a sale. According to the article’s sources, LifeLock management is currently working with Goldman Sachs on the process and final bids could be as much as $2 billion. The bids are due this month. 22 top funds were long Lifelock Inc (NYSE:LOCK) at the end of the second quarter, up 6 funds from the previous quarter.
Bunge Ltd (NYSE:BG) and Archer Daniels Midland Company (NYSE:ADM) are off by 2.7% and 6.2%, respectively, due to some bearish comments by JPMorgan’s Ann Duignan on ADM. Given that Bunge and ADM are related, Bunge shares have also taken it on the chin due to the analyst comments. Specifically, Duignan thinks that a Trump Presidency will likely have a negative effect on the agriculture sector as a stronger dollar could reduce American farm export competitiveness relative to South American farm products. Changes in trade deals could also impact agriculture exports in a negative way as well. Due to that sentiment, the analyst trimmed her price target to $36 from $42 for ADM. Of the 749 top funds in our database, 26 and 33 reported bullish positions in Archer Daniels Midland Company (NYSE:ADM) and Bunge Ltd (NYSE:BG) at the end of Q2.
On the next page, we find out why Goldcorp Inc (USA), and Barrick Gold Corporation (USA) are in the red.