Why Netflix, Alphabet, Yahoo! and Two Other Stocks Are Trending Today

After a solid EIA report on Wednesday and positive price action over the past few trading sessions, all eyes are on the informal OPEC meeting in Algeria beginning September 26. If Russia and OPEC producers can agree to a ‘freeze’, sentiment around crude could improve and lift energy stocks (and by extension, banks and broader indexes) higher.

In this article, we will take a closer look into why five stocks, Netflix, Inc. (NASDAQ:NFLX), HB Fuller Co (NYSE:FUL), Oclaro, Inc. (NASDAQ:OCLR), Alphabet Inc (NASDAQ:GOOG), and Yahoo! Inc. (NASDAQ:YHOO), are in the spotlight. We will also use the latest 13F filings to determine how the funds we track at Insider Monkey are collectively positioned towards each company in question.

At Insider Monkey, we track around 740 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).

Netflix, Inc. (NASDAQ:NFLX) isn’t done producing original content. According to CFO David Wells, the online streamer has a goal of having half of the content on its website be licensed TV shows and movies, and the other half be original productions over the next few years. Currently, Netflix, which is famous for its original content such as ‘House of Cards’, is ‘one-third to halfway’ toward its target. The internet giant expects to have 600 hours of original programming on its site in 2016, up from around 450 hours last year. Having more original content is important for Netflix because it improves customer lock-in and differentiates Netflix from competitors. Karthik Sarma‘s SRS Investment Management trimmed its stake  in Netflix, Inc. (NASDAQ:NFLX) by 2% in the second quarter to 10.19 million shares at the end of June.

Traders are watching HB Fuller Co (NYSE:FUL) today after the company reported EPS of $0.64 on revenue of $512.86 million for its fiscal third quarter, missing the consensus by $0.03 and $21.84 million, respectively. Sales fell by 2.2% year-over-year as lower average selling prices and negative forex translation negatively impacted growth. In terms of guidance, HB Fuller Co (NYSE:FUL)’s management expects fiscal 2016 adjusted EPS in the range of $2.45 to $2.50 versus the previous outlook of $2.45 to $2.60. Of the around 750  funds that we track, 23 had a bullish position in HB Fuller Co (NYSE:FUL) at the end of the second quarter.

On the next page, we find out why Oclaro, Alphabet, and Yahoo! are trending. 

Oclaro, Inc. (NASDAQ:OCLR) is in the spotlight after the company priced its public offering of 15 million shares of common stock at $8.35 per share. In addition, the company has granted the underwriters a 30-day option to buy an additional 2.25 million shares. Oclaro intends to use the proceeds for general corporate purposes, including for working capital, capex, and acquisitions of complementary products (although it doesn’t have any agreements for any specific acquisition at the current time). According to our data, 29 funds owned $113.46 million worth of Oclaro, Inc. (NASDAQ:OCLR)’s stock, which accounted for 20.70% of the float on June 30, versus 33 funds and $149.32 million, respectively, on March 31.

In its quest to diversify its revenue streams, Alphabet Inc (NASDAQ:GOOG) is going beyond the cloud, and targeting the lucrative market of private data centers for banks and other institutions that need mission-critical safety. According to The Information, Alphabet’s Google is creating data storage software that companies can use for their own private data centers. This is the opposite of the broader trend of Alphabet and other cloud providers asking customers to transition from doing-it-themselves to doing-it-in-the-cloud-and-saving-money. The development shows that Alphabet is willing to be flexible in its quest to win business from enterprises. Alphabet Inc (NASDAQ:GOOG) was one of the most widely held stocks among the smart money set in the second quarter, as 126 funds tracked by Insider Monkey held Class C shares and 136 funds had positions in the Class A stock at the end of June.

Yahoo! Inc. (NASDAQ:YHOO) shareholders woke up to some disappointing news today after Recode reported that the company is expected to confirm that it has suffered a massive hack that may have exposed around 200 million user accounts or more. Recode added that there is a probability of legal actions and government investigations. Given the scale and scope of the hack, it is unclear at the moment whether the final sale price of Yahoo to Verizon Communications Inc. (NYSE:VZ) will be immune from any changes. A total of 81 funds from our database owned shares of Yahoo! Inc. (NASDAQ:YHOO) at the end of June, down by 16 funds from the previous quarter.

Disclosure: None