Why PepsiCo, Philip Morris, Fitbit, and Two Other Stocks Are Making Headlines Today

With the end of the quarter approaching once again, the markets are quiet as investors await the latest economic data-points slated to be made public this week.

In this article, we will find out why traders are buzzing about five stocks, PepsiCo, Inc. (NYSE:PEP), Philip Morris International Inc. (NYSE:PM), Fitbit Inc (NYSE:FIT), Transocean LTD (NYSE:RIG), and Actinium Pharmaceuticals Inc (NYSEMKT:ATNM). In addition, we will take a look at what the investors from our database think about the companies in question.

While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).

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PepsiCo, Inc. (NYSE:PEP) shares are in the green after the consumer staple reported solid results for its fiscal third quarter. During the period, PepsiCo earned $1.40 per share, beating estimates by $0.08 per share. Revenue was $16.03 billion, down by 1.8% year-over-year mainly due to the strong dollar, but still $200 million better than the consensus estimate. Organic revenue for the period grew by 4.2% year-over-year and the company’s core constant-currency EPS inched up 7% due to core operating margin rising 30 basis points and core gross margin expanding 50 basis points. For 2016, PepsiCo Inc. (NYSE:PEP) expects 2016 core earnings of $4.78 per share and approximately 4% organic revenue growth when adjusting for certain factors. Donald Yacktman‘s Yacktman Asset Management cut its stake in PepsiCo, Inc. (NYSE:PEP)  by 21% in the second quarter to just over 10.61 million shares held at the end of June.

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Philip Morris International Inc. (NYSE:PM) is trending after the company updated its full year 2016 guidance during its investor day. Due to various changes, the company now sees full year EPS of $4.53 to $4.58, excluding the impact of share repurchases. That’s better than the average analyst estimate of $4.49 per share. The management also expects total cigarette sector volume to inch lower by 2% to 2.5% year-over-year when excluding China and the United States. The hedge fund sentiment towards Philip Morris International Inc. (NYSE:PM) has been mostly stable. According to our database of around 749 funds, 47 of them were long Philip Morris International Inc. (NYSE:PM) at the end of the second quarter, down by one from the previous quarter.

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On the next page, we take a closer look at Fitbit, Transocean LTD, and Actinium Pharmaceuticals.Traders are watching Fitbit Inc (NYSE:FIT) after Pacific Crest analyst Brad Erickson lowered his rating on the stock to ‘Underweight’ from ‘Sector Weight’. Erickson said that channel checks show the company’s flagship Charge 2 product isn’t selling as well as expected as inventory is building and the sell-through isn’t as strong as initial Alta/Blaze levels. In the longer term, competition from Apple Inc. (NASDAQ:AAPL) could also hurt. Erickson thinks the downside is around $11 per share. A total of 29 funds tracked by Insider Monkey owned $297.86 million worth of Fitbit Inc (NYSE:FIT)’s stock, which accounted for 11.20% of the float on June 30.

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Carl Icahn‘s Icahn Capital Lp’s ‘tax planning’ moves continued in the energy patch, this time with the guru selling Transocean LTD (NYSE:RIG) to better optimize his payments for Uncle Sam. According to the latest regulatory filings, Icahn has cut his stake to 1.5% of the offshore driller (5.48 million shares), down from the previous 5.88% (see article). Despite cutting his stake, Icahn still has confidence in the management team going forward. Transocean is also in the spotlight due to yesterday’s tentative OPEC agreement to cut production to 32.5-33 million barrels per day, down from the current 33.4 million barrels per day. However, the final details will have to be worked out in late November. A total of 32 investors tracked by us were long Transocean LTD (NYSE:RIG) at the end of June, down by seven funds from the previous quarter.

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Actinium Pharmaceuticals Inc (NYSEMKT:ATNM) shares are down by around 21% after the company announced a proposed public offering of 8 million shares common stock at $1.25 a piece, in addition to granting underwriters a 30-day option to purchase up to an additional 15% of the stock sold in the offering. None of the 749 top funds that we track held any shares in Actinium Pharmaceuticals Inc (NYSEMKT:ATNM) at the end of the second quarter.

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Disclosure: none