The three major indexes are flat this morning as many traders look for a sense of market direction before jumping in. Many eyes will also be on tonight’s Vice Presidential debate to see where Tim Kaine and Mike Pence stand on the issues.
In this article, we will find out why five stocks, Darden Restaurants, Inc. (NYSE:DRI), Kinder Morgan Inc (NYSE:KMI), Ophthotech Corp (NASDAQ:OPHT), Wells Fargo & Co (NYSE:WFC), and Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC), are in the spotlight today. We will also take a look at the last 13F filings of smart money investors from our database to see what they collectively think about the companies in question.
At Insider Monkey, we track around 740 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).
Darden Restaurants, Inc. (NYSE:DRI)’s stock is in the green after the company reported better-than-expected earnings for its fiscal first quarter. For the period ended August 28, Darden posted earnings of $0.88 per share, versus estimates of $0.82 per share. Corresponding revenue was $1.71 billion, up by 1.2% year-over-year, and just $10 million under the Street’s estimate. Same-restaurant sales inched up by 1.3%, led by a 2% jump in Olive Garden revenue and the company bought back around $196 million worth of its own shares. Darden Restaurants, Inc. (NYSE:DRI) also increased its fiscal 2017 EPS outlook to between $3.87 and $3.97 from the previous $3.80-$3.90 range. Full-year same store sales growth is still seen coming in the range between 1% and 2%. Jeffrey Smith‘s Starboard Value Lp cut its stake in Darden Restaurants, Inc. (NYSE:DRI) by 42% to just under 3.9 million shares during the second quarter.
Traders are watching Kinder Morgan Inc (NYSE:KMI) after Selman Akyol, analyst at Stifel, downgraded the stock to ‘Hold’ from ‘Buy’, citing valuation for the ratings change. Due to improved sentiment and a rebound in oil prices, Kinder Morgan’s shares have been one of the best major stock performers this year, rising by 57% year-to-date and the rally in the infrastructure giant’s shares have brought Kinder Morgan stock close to Akyol’s target price of $24 per share. Unlike what other analysts do at times when the price of a company approaches the target price, Akyol didn’t bump up his price target, at least not yet. Of the 749 funds in our database, 53 of them amassed $1.77 billion worth of Kinder Morgan Inc (NYSE:KMI)’s stock, which accounted for 4.20% of the float on June 30, versus 58 and $2.29 billion, respectively, on March 31.
On the next page, we take a closer look at Ophthotech Corp, Wells Fargo & Co, and Telefonaktiebolaget LM Ericsson.