Traders Are Keeping A Close Watch On These Five Stocks Today

Seeing as earnings season is beginning in earnest, many investors are paying careful attention to the markets to gauge the state of individual companies as well as broader sectors and industries. Among the stocks experiencing greater than normal interest today are First Republic Bank (NYSE:FRC), Laredo Petroleum Inc (NYSE:LPI), Lululemon Athletica inc. (NASDAQ:LULU), Cree, Inc. (NASDAQ:CREE), and BlackRock, Inc. (NYSE:BLK). In this article, we’ll find out why each stock is trending and use SEC filings to determine how hedge funds are positioned in them.

At Insider Monkey, we track around 765 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details here).

First Republic Reports Earnings

First Republic Bank (NYSE:FRC) reported mixed second quarter results, earning $0.97 per share on revenue of $535.08 million for the period. The results beat the bottom-line consensus estimate by $0.06 per share but missed the top-line consensus by $33.45 million. Core net interest margin for the quarter was 3.16%, up from 3.14% in the prior quarter. The bank’s efficiency ratio came in at 59.8% while tangible book value increased by 13.8% to $32.53 per share. Of the 766 active funds that we track, 19 funds owned $138.93 million worth of First Republic Bank (NYSE:FRC) shares on March 31, which accounted for 1.50% of the stock’s float.

Laredo In Expansion Mode

Laredo Petroleum Inc (NYSE:LPI) announced today that it has signed a purchase agreement to buy additional acreage within the Midland Basin for $125 million. The purchase adds around 9,200 net acres to Laredo’s holdings, including 6,300 net acres in the Spraberry interval and 2,900 net acres in the Spraberry, Canyon, Cline, Upper, Middle and Lower Wolfcamp zones. Management expects the acquisition to improve capital efficiencies and to deliver value to shareholders in the long term. 15 funds in our system owned shares of Laredo Petroleum Inc (NYSE:LPI) as of the most recent 13F reporting period.

On the next page we’ll examine the latest news driving the trading action on shares of Lululemon Athletica, Cree Inc, and BlackRock Inc this morning.

Lululemon Upgraded

Traders are watching Lululemon Athletica inc. (NASDAQ:LULU) today after analysts at Wells Fargo raised their price target on the yoga apparel maker’s stock to $84-to-$86 from the previous $75-to-$77. The analysts raised their price target after talking with management, who provided the analysts with more confidence related to the company’s future plans. Lululemon shares are up by 46% year-to-date. 28 funds in our system were long Lululemon Athletica inc. (NASDAQ:LULU) as of the most recent 13F reporting period, up by six funds quarter-over-quarter.

Cree Rises on Asset Divestment

Cree, Inc. (NASDAQ:CREE) shares are 11% in the green this morning after the company agreed to sell its Wolfspeed Power and RF division to Infineon Technologies AG for $850 million in cash. The sale will help Cree focus more on LED lighting and provide the company with valuable liquidity to potentially use to acquire other companies and/or to buy back its stock. Management expects the transaction to close by the end of 2016. In addition, Cree has provided preliminary revenue of $388 million for its fourth quarter of fiscal year 2016, which is at the upper end of the company’s guidance range. 17 savvy funds that we track owned shares of Cree, Inc. (NASDAQ:CREE) at the end of the first quarter.

BlackRock On Watch After Earnings

Asset manager BlackRock, Inc. (NYSE:BLK) reported second quarter earnings of $4.78 per share on revenue of $2.8 billion, beating profit estimates by $0.01 per share and meeting revenue expectations. Although AUM rose by 4% year-over-year to $4.89 trillion, the company’s base fees inched lower by 2% due to asset shifts. Operating margin shrank by 100 basis points year-over-year to 43.9% and the company bought back $275 million of its shares in the quarter. 29 funds in our system owned shares of BlackRock, Inc. (NYSE:BLK) at the end of March, down by five funds from the end of 2015.

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