Why Microsoft Corporation (MSFT), KB Home (KBH) and Three Other Stocks Are on Investors’ Radars Today

Traders are watching crude today after yesterday’s API report showed a sizable draw-down in inventories over the past week. If the EIA confirms and OPEC can provide some positive statements during its informal Algerian meeting, sentiment around the commodity could improve.

In this article, we take a closer look at five other stocks traders are watching today: Microsoft Corporation (NASDAQ:MSFT), KB Home (NYSE:KBH), FedEx Corporation (NYSE:FDX), 8Point3 Energy Partners LP (NASDAQ:CAFD), and Mirna Therapeutics Inc (NASDAQ:MIRN). In addition, we will use data from the latest round of 13F filings in order to see how the funds from our database traded these stocks during the second quarter.

Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 700 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).

Microsoft Corporation (NASDAQ:MSFT) is in the spotlight after the software giant announced that it is hiking its quarterly dividend by 8.3% to $0.39 per share. Moreover, Microsoft’s board has approved a new buyback authorization of up to $40 billion. At current prices, Microsoft Corporation (NASDAQ:MSFT)’s dividend translates into a 2.75% forward yield, considerably higher than the current 10-year yield. Ken Fisher’s Fisher Asset Management raised its position by 1% in the second quarter to over 18.3 million shares of Microsoft Corporation (NASDAQ:MSFT) at the end of June.

Traders are talking about KB Home (NYSE:KBH) after the home builder reported earnings of $0.42 per share for its third quarter, beating the consensus by $0.03 per share. Although revenues for the time period came in at $913.28 million, or $30.86 million under the average analyst estimate, traders chose to focus on the bottom line beat and shares of KB Home are well in the green in extended market trading. The future is also strong for KB Home as the company’s backlog rose by 17% year-over-year to $1.85 billion. Shares of the company are now up more than 21% year-to-date and trade for around 9.0 times forward earnings. Of the around 750 funds we track, 16 owned $136.74 million worth of KB Home (NYSE:KBH)’s stock, which accounted for 10.70% of the float on June 30.

On the next page, we take a closer look at FedEx Corporation, 8Point3 Energy Partners LP, and Mirna Therapeutics Inc.FedEx Corporation (NYSE:FDX) surprised the market and reported solid earnings for its fiscal first quarter, with EPS of $2.90 on sales of $14.7 billion, beating the average estimate by $0.12 per share and $890 million, respectively. Sales rose by 19.7% year-over-year (mainly due to the TNT integration), and the logistic company’s operating margin remained flat at 9.3%. Guidance is solid, with the company’s management expecting fiscal 2017 earnings of $11.85 to $12.35 per share, versus the average analyst estimate of $11.97 per share. A total of 46 funds from our database were long FedEx Corporation (NYSE:FDX) at the end of June, up by one fund from the previous quarter.

8Point3 Energy Partners LP (NASDAQ:CAFD) earned $0.38 per share on revenues of $26.11 million for its third quarter, meeting bottom-line estimates and beating the top line by $2.87 million. Adjusted EBITDA was $32.9 million and CAFD was $24.1 million for the same time period. In terms of payouts, management declared a third-quarter distribution of $0.2406 per share and guided for a fourth quarter distribution of $0.249 per share. Moreover, the yieldco also agreed to buy SunPower Corporation (NASDAQ:SPWR)’s 49% minority interest in its 102-MW Henrietta project for $134 million in cash. The number of funds tracked by Insider Monkey with holdings in 8Point3 Energy Partners LP (NASDAQ:CAFD) inched up by one quarter-over-quarter to 8 at the end of June.

Last but not least, nano-cap Mirna Therapeutics Inc (NASDAQ:MIRN) is trending after the company announced a decision to close its Phase 1 study of its lead product candidate and investigational microRNA therapy for multiple cancers, MRX34. The company halted the study due to multiple immune-related severe adverse events observed in patients dosed with the drug. Due to its small size, none of the funds tracked by Insider Monkey owned shares of Mirna Therapeutics Inc (NASDAQ:MIRN) at the end of the second quarter.

Disclosure: none