It’s official. Interest rates in the United States will remain low for at least several more months, giving the global economy more time to recover. Although low rates are good news, the three indexes sold off after yesterday’s FOMC meeting and are down today as some traders evidently hoped for even more accommodating language that didn’t appear. Among the stocks trending in pre-market are Credit Suisse Group AG (ADR) (NYSE:CS), Walt Disney Co (NYSE:DIS), ASML Holding NV (ADR) (NASDAQ:ASML), Devon Energy Corp (NYSE:DVN), and Pioneer Natural Resources (NYSE:PXD). Let’s dive in and see what the smart money thinks of each stock.
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).
Credit Suisse Group AG (ADR) (NYSE:CS)
According to the Swiss National Bank, Credit Suisse Group AG (ADR) (NYSE:CS) will need to raise an additional 10 billion francs ($10.4 billion) to meet new financial regulation requirements. Although the amount needed is large, the company won’t be in a big financial pinch due to the regulation. Credit Suisse could potentially raise a substantial part of that requirement by issuing contingent convertible bonds. Credit Suisse needs more capital because Switzerland’s government finalized its too-big-to-fail rules last month, including requiring a 3.5% high equity common equity tier 1 ratio. Among the funds we track, 10 funds owned $191.76 million worth of Credit Suisse Group AG (ADR) (NYSE:CS)’s stock, which accounted for 0.70% of the float on March 31, versus three funds and $233.17 million, respectively, a quarter earlier. Shares of the Swiss bank are down by around 2% in pre-market.
A Beginning of an Era for Walt Disney
It’s a beginning of an era for Walt Disney Co (NYSE:DIS), as the company has officially opened its $5.5-billion Shanghai Disneyland for the first time. Shanghai Disneyland is Disney’s most capital intensive overseas investment and is the company’s first theme park in the burgeoning nation with hundreds of millions of middle income consumers. Disney bulls hope Shanghai Disneyland will be more successful than some of its other international theme parks and help deliver good returns for the diversified entertainment company. A total of 49 funds owned shares of Walt Disney Co (NYSE:DIS) at the end of the first quarter, down by two funds from the previous quarter.
On the next page, we examine ASML Holding NV (ADR), Devon Energy Corp, and Pioneer Natural Resources.