Investors are in ‘risk-off’ mode as expectations of a Fed interest rate hike after the election rises. Due to that sentiment, the Dow Jones index is off 74 points, the NASDAQ is 0.61% in the red, and the S&P 500 has inched lower by 0.44%.
Among the stocks that are making headlines today are Deckers Outdoor Corp (NYSE:DECK), Verizon Communications Inc. (NYSE:VZ), Xerox Corp (NYSE:XRX), Goldman Sachs Group Inc (NYSE:GS), and Morgan Stanley (NYSE:MS). Let’s analyze the associated catalysts and delve into the hedge fund sentiment surrounding each stock.
At Insider Monkey, we track around 730 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).
Deckers Outdoor Corp (NYSE:DECK) shares are 7% in the red after Susquehanna downgraded the stock to ‘Negative’ from ‘Neutral’ and trimmed its price target to $49 from $59. Analyst Sam Poser changed the rating because he thinks the perception of the UGG brand might be dinged due to promotional activity. In particular, Poser noted that ugg.com has started giving out $20 reward certificates online and that the company has allowed the brand to be sold at Amazon.com, which makes it more commonplace and less of an aspirational brand. Of the 749 funds we track, 15 funds owned $285.84 million worth of Deckers Outdoor Corp (NYSE:DECK)’s stock, which accounted for 15.50% of the float on June 30, versus 21 funds and $312.22 million, respectively, on March 31.
Verizon Communications Inc. (NYSE:VZ) is in the spotlight today after the telecom announced it will close call centers in five states that will impact around 3,200 workers. Verizon has said that all have been offered jobs at other sites, or severance packages for those who do not want to relocate. The telecom currently has around 162,000 employees in the States. A total of 52 funds tracked by us were long Verizon Communications Inc. (NYSE:VZ) at the end of June, down by nine funds from the previous quarter.
On the next page, we find out why Xerox Corp, Goldman Sachs Group, and Morgan Stanley are trending.