Netflix, Rio Tinto, and Exxon Mobil Among 5 Stocks Making Waves Today

On the first day of the trading week and the second trading day of the quarter, the markets are off sharply due to renewed Brexit concerns. The Dow is off by almost 140 points while the Nasdaq is over 1% in the red. Crude futures have performed even worse, falling by over 5%.

In this article we’ll find out why traders are buzzing about five stocks today: Comcast Corporation (NASDAQ:CMCSA), Netflix, Inc. (NASDAQ:NFLX), Rio Tinto plc (ADR) (NYSE:RIO), Exxon Mobil Corporation (NYSE:XOM), and InterOil Corporation (USA) (NYSE:IOC), and analyze how top hedge funds are positioned among the five companies.

At Insider Monkey, we track over 765 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).

Netflix to be Available Through Certain Set-Top Boxes

Netflix, Inc. (NASDAQ:NFLX) shares are 1.3% in the green after Kara Swisher of Re/code reported that cable giant Comcast Corporation (NASDAQ:CMCSA) will include Netflix in the company’s X1 set-top box platform. Although Netflix has done similar deals with smaller cable companies, the Comcast deal will likely make a bigger impact on Netflix’s subscriber count given Comcast’s wide distribution.

The deal is also a win for Comcast as it makes the company’s video offering more competitive. Although both companies have work to do, they anticipate offering the proposed functionality later in 2016. Netflix, Inc. (NASDAQ:NFLX) was in 64 top funds’ portfolios as of the most recent 13F reporting period, while Comcast Corporation (NASDAQ:CMCSA) was in the portfolios of 90 funds from among the same pool of top investors.

On the next page we examine why investors are showing heightened interest in Rio Tinto, Exxon Mobil, and InterOil today.
Rio Tinto Sells a Coal Mine

Rio Tinto plc (ADR) (NYSE:RIO) shares have retreated by 3.5% after the commodity giant sold its Blair Athol coal mine for a mere one Australian dollar to Australian miner TerraCom Ltd. In addition, Rio Tinto will pay TerraCom AUD80 million ($59.69 million) for rehabilitation costs for the mine site. The Blair Athol coal mine is one of the oldest in Australia’s Queensland state and its profitability has been negatively affected due to lower thermal coal prices. 24 funds in our database owned shares of Rio Tinto plc (ADR) (NYSE:RIO) at the end of the first quarter, a 50% hike from the end of the fourth quarter of 2015.

Australian Newspapers Name Exxon as Mystery InterOil Suitor

Energy giant Exxon Mobil Corporation (NYSE:XOM) is reportedly the new mystery bidder for the Papua New Guinea E&P InterOil Corporation (USA) (NYSE:IOC). Although InterOil had previously agreed to sell itself to Oil Search in a $2.2 billion cash-and-stock deal, the company received an unsolicited, conditional non-binding proposal on June 30 from a third party to acquire 100% of its outstanding common shares. Although Exxon Mobil has not acknowledged that it is the mystery suitor, The Australian reports that bankers at JPMorgan and other investment banks are likely assessing Exxon’s offer, which currently is under negotiation and has thus far not been publicly disclosed. The Australian also writes that Exxon may want InterOil due to the company’s “stake in the big onshore Elk/Antelope field to help it profitably expand the two-train PNG LNG project that exports gas from the Highlands through an LNG plant at Port Moresby.” Exxon will likely have until July 28 to win the approval of InterOil’s board.

Of the 766 elite funds that we track, 60 owned $2.5 billion worth of Exxon Mobil Corporation (NYSE:XOM) shares on March 31, which accounted for a mere 0.70% of the float. Ten funds had stakes in InterOil Corporation (USA) (NYSE:IOC) at the end of the first quarter, owning 9.40% of its float.

Disclosure: None