After a huge decline on Friday, a big rebound on Monday, and another sharp drop on Tuesday, it is safe to say that volatility is officially back just in time for September, which is usually one of the more volatile months historically.
In addition to the market’s volatility, investors’ interest is also being captured today by Tesla Motors Inc (NASDAQ:TSLA), SolarCity Corp (NASDAQ:SCTY), B&G Foods, Inc. (NYSE:BGS), Wal-Mart Stores, Inc. (NYSE:WMT), and Wells Fargo & Co (NYSE:WFC). Let’s dive in and analyze why these stocks are generating buzz and see how the smart money was positioned in them at the end of the second quarter based on the latest 13F data.
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Tesla Motors Inc (NASDAQ:TSLA) and SolarCity Corp (NASDAQ:SCTY) are back in the headlines today after famed short seller Jim Chanos called the prospective merger between the two “the height of folly” and “crazy”. Chanos is particularly bearish on SolarCity, calling the company’s business model “just plain uneconomic.” He estimates that the combined entity would burn around $1 billion in cash per quarter if the merger went through. Chanos isn’t a fan of the companies’ corporate governance either and cites Tesla’s unwillingness to provide SolarCity with bridge financing despite the fact that their merger is pending.
In addition, Tesla could also be facing stiffer competition in the electric vehicle mass market segment in the near-term, courtesy of General Motors Company (NYSE:GM)’s Chevy Bolt, which goes 238 miles on a single charge, a number that might be greater than what the Model 3 will offer. Despite Chanos’ comments, some hedge fund managers are still fans of the two companies. Among the funds in our database, 26 had a long position in SolarCity Corp (NASDAQ:SCTY) on June 30, while 36 were long Tesla Motors Inc (NASDAQ:TSLA).
Traders are talking about B&G Foods, Inc. (NYSE:BGS) today after Reuters reported that the company is in talks to buy the maker of Mazola cooking oil, ACH Food Companiies Inc, from Associated British Foods Plc. Analysts think the division could be sold for as much as $300 million-to-$400 million. Although the two companies are in talks, there is no guarantee that the deal will be completed. Ric Dillon‘s Diamond Hill Capital inched up its holding in B&G Foods, Inc. (NYSE:BGS) by 1% during the second quarter, to almost 2.4 million shares as of June 30.
On the next page, we’ll examine why Wal-Mart and Wells Fargo are in the spotlight this morning.