NVIDIA, IBM, Movado, and More Have Investors Buzzing This Morning

Although it’s earnings season, the VIX volatility index is trading at a modest 13, meaning market fear is not overly high despite the Brexit vote a few weeks ago. In this article, we’ll check in on five stocks that investors are buzzing about this morning and see how the hedge funds tracked by Insider Monkey have been trading them. Those five stocks are NVIDIA Corporation (NASDAQ:NVDA), Fossil Group Inc (NASDAQ:FOSL), Movado Group, Inc (NYSE:MOV), International Business Machines Corp. (NYSE:IBM), and Infosys Ltd ADR (NYSE:INFY).

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).

NVIDIA Downgraded

Given the stock’s 62% year-to-date rally, it’s not surprising that some analysts think NVIDIA Corporation (NASDAQ:NVDA) isn’t worth buying at current levels. Although NVIDIA is better positioned than most to benefit from the rise of AI and other emerging technologies, the company will still face substantial competition ahead. It is that competition worry from peers such as Advanced Micro Devices, Inc. (NASDAQ:AMD) and Intel Corporation (NASDAQ:INTC) that prompted analysts at Wells Fargo to downgraded NVIDIA to ‘Underperform’. The analysts think NVIDIA has an intrinsic valuation of around $30-to-36 per share. The number of elite funds in our system with holdings in NVIDIA Corporation (NASDAQ:NVDA) rose by two quarter-over-quarter to 43 as of the end of March.

Watchmakers on Watch After Swatch Results

Traders are watching Fossil Group Inc (NASDAQ:FOSL) and Movado Group, Inc (NYSE:MOV) today after fellow watch maker Swatch Group released disappointing preliminary results for the first half of 2016, as that company’s net sales fell by around 12% year-over-year, while operating profit and net income dropped by 50-to-60%. Sales dropped significantly in Hong Kong, France, and Switzerland, resulting in Swatch Group shares falling by around 10% in Europe today. Although each company is different, the soft guidance numbers could prompt some jittery traders to sell first and ask questions later. Whether Fossil and/or Movado will also report soft numbers is otherwise only speculation right now.  Shares of Fossil have dropped by 5% this morning, while Movado shares have retreated by 2%.

Joel Greenblatt‘s Gotham Asset Management added a new position in Fossil Group Inc (NASDAQ:FOSL) of 683,298 shares to its portfolio during first quarter, while Ken Fisher‘s Fisher Asset Management reported a stake of 32,980 shares of Movado Group, Inc (NYSE:MOV) as of June 30, cutting his stake in the stock by 80% during the second quarter.

On the next page we’ll see why International Business Machines Corp and Infosys Ltd ADR are in the spotlight this morning.
IBM Dives Deeper into the Blockchain

International Business Machines Corp. (NYSE:IBM) is in the spotlight today after the Wall Street Journal reported that the tech giant is launching a new platform for companies to try out blockchain record keeping software for their supply chains. IBM’s platform will broaden blockchain’s use beyond financial services and could help companies save money in the long run. Given IBM’s long history of pioneering technology advances, it’s not surprising that IBM would lead the way in broadening blockchain’s uses. Of the 766 active funds that we track, 53 were shareholders of International Business Machines Corp. (NYSE:IBM) on March 31, owning $14.17 billion worth of the company’s shares, which accounted for 9.70% of the float.

Infosys Reports Earnings

Infosys Ltd ADR (NYSE:INFY) shares are 8% lower this morning on robust volume after the company reported its first quarter of fiscal year 2017 financial results. For the period, Infosys earned $0.22 per share on revenue of $2.5 billion, missing the consensus estimates by $0.01 per share and $50 million, respectively. The company missed estimates due to “unanticipated headwinds in discretionary spending in consulting services and package implementations as well as slower project ramp-ups in large deals that [Infosys] had won in earlier quarters, resulting in a lower than expected growth in Q1.” Meanwhile, operating profit rose by 11.3% year-over-year and the company added three clients to the $100 million-and-up category. Management expects fiscal year 2017 revenue to grow by 10.5-to-12% in constant currency terms. 21 funds in our database were long Infosys Ltd ADR (NYSE:INFY) as of March 31, unchanged over the first quarter.

Disclosure: None