Why Goldman Sachs, Deckers, and Three Other Stocks Are Trending Today

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.

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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.

Xerox Corp (NYSE:XRX) is in the red after the Wall Street Journal reported that Xerox’s biggest shareholder, Darwin Deason, has filed a lawsuit to prevent the company from splitting into two. Deason thinks the split violates a 2009 agreement he struck with Xerox when the company bought his business, Affiliated Computer Services Inc. Deason owned around 6.1% of Xerox at the beginning of 2016. Xerox has in turn called Deason’s lawsuit ‘meritless’ and says it will continue to proceed with its planned separation. The number of funds from our database with holdings in Xerox Corp (NYSE:XRX) rose by two quarter-over-quarter to 31 at the end of June.

Wall Street’s two leading investment banks, Morgan Stanley (NYSE:MS) and Goldman Sachs Group Inc (NYSE:GS), are trending after Bloomberg reported that sources say Snapchat has chosen the two to lead its initial public offering, which could potential value the app maker at a $25 billion valuation. Given the traditional IPO fee percentage ranges, Snapchat’s large valuation means plenty of banker fees to go around, and more cash flow for the two financial companies’ shareholders. The IPO of Snapchat could also eventually lead to the IPO of more Silicon Valley companies to come, which again would be good news for the investment banks. According to our data, 68 funds held shares of Goldman Sachs Group Inc (NYSE:GS) and 49 funds were long Morgan Stanley (NYSE:MS) at the end of the second quarter.

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