Although the S&P 500 is 0.30% in the red and the NASDAQ is 1.20% lower on the back of several tech giants’ disappointing earnings reports, shares of Advanced Micro Devices, Inc. (NASDAQ:AMD), Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Southwestern Energy Company (NYSE:SWN), NGL Energy Partners LP (NYSE:NGL), and Skechers USA Inc (NYSE:SKX) have surged after the bell. In this article, we examine why traders are piling into each stock and analyze what hedge funds think of them too.
While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which 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).
Chinese JV Gives Advanced Micro Devices a Boost
Advanced Micro Devices, Inc. (NASDAQ:AMD) is almost a third higher today after the company reported better than expected first quarter results and announced a Chinese joint venture. For the time period between January 1 and March 31, Advanced Micro Devices lost $0.12 per share on revenue of $832 million, versus estimates of a $0.13 loss per share and sales of $818.16 million. Guidance is for revenue growth in the second quarter of 12-18% quarter-over-quarter, versus analyst estimates of 7% sequential growth. The company also disclosed that it is forming a joint venture with the Chinese firm THATIC to develop chips to serve the Chinese server market. The company gave more details on the joint venture and licensing arrangement:
“AMD licensed high-performance processor and SoC technology to a newly-created JV it has formed with THATIC (Tianjin Haiguang Advanced Technology Investment Co., Ltd.) to develop SoCs tailored to the Chinese server market that will complement AMD’s own offerings. The $293 million licensing agreement is a meaningful step in AMD’s IP monetization strategy intended to accelerate the Company’s growth and better monetize its valuable assets. Payments are contingent upon the JV achieving certain milestones. AMD also expects to receive royalty payments from the JV’s future product sales.”
Cliff Asness’ AQR Capital Management was among 16 funds from our database that held shares in Advanced Micro Devices, Inc. (NASDAQ:AMD) at the end of December.
Valeant Gets a New Boss
Valeant Pharmaceuticals Intl Inc (NYSE:VRX)’s shares are up by more than 8% in morning trading after the Dow Jones reported that the drug company is close to finishing a contract that would make Joseph Papa Valeant’s new CEO. Papa is currently the CEO of Perrigo Company plc Ordinary Shares (NYSE:PRGO), and would replace current Valeant CEO Michael Pearson. Valeant Pharmaceuticals Intl Inc (NYSE:VRX) could use a steady hand, as its stock is down substantially from its 2014 highs. Bill Ackman’s Pershing Square is one of the leading shareholders in the company.
On the next page, we examine Southwestern Energy Company, NGL Energy Partners LP, and Skechers USA Inc.