After several volatile days, the markets are quiet this morning, as all three major index futures are modestly in the green. Although macro worries still abound, many traders believe that there is a considerable chance that the Fed will leave interest rates the same during the next FOMC meeting on September 20 and 21.
Among the stocks in the headlines today are The Coca-Cola Co (NYSE:KO), Apple Inc. (NASDAQ:AAPL), Mobileye NV (NYSE:MBLY), Tesla Motors Inc (NASDAQ:TSLA), and Walt Disney Co (NYSE:DIS). Let’s take a closer look at why these major companies are in the news and use the latest 13F data to see how successful hedge funds have been trading them.
Our research determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).
The Coca-Cola Co (NYSE:KO) is in the spotlight today after the Wall Street Journal reported that various beverage companies have sued to prevent the city of Philadelphia from imposing what is basically a soda tax. Philadelphia was the first major city in America to pass such a tax, in June of this year, and analysts estimate that the tax could raise soda prices by around 31% on average. If Philadelphia succeeds, other cities could follow, which would severely hurt Coca-Cola’s profit in the United States. Critics of soda say that the drink is not as healthy as other types of non-alcoholic beverages. Warren Buffett‘s Berkshire Hathaway owned 400 million shares of The Coca-Cola Co (NYSE:KO), with the position accounting for almost 14% of the value of the legendary manager’s equity portfolio at the end of June.
It looks like demand for the new iPhone is lights out, as Apple Inc. (NASDAQ:AAPL) recently confirmed what many analysts suspected: that the tech giant has sold out of the iPhone 7 Plus already. In addition, the jet black iPhone 7 is also sold out. Given that the iPhone accounts for the majority of Apple’s profit, the company will need its iPhones to continue to sell in order for investors to get the return that they expect. In conjunction with the latest news, analysts at Credit Suisse raised their 2016 and 2017 EPS estimates for the company to $8.22 and $10.09 respectively, from the previous targets of $7.95 and $9.84. The analysts have an ‘Outperform’ rating and $150 price target on Apple shares. The number of funds in our database with holdings in Apple Inc. (NASDAQ:AAPL) fell by 36 during the second quarter to 116 at the end of June.
On the next page, we’ll examine the comments from Mobileye concerning Tesla, as well as the latest on Walt Disney.