With the end of the quarter today, investors are on edge for any sort of unexpected volatility due to window dressing or ‘risk-off’ stance in the run-up to the U.S. elections in November.
In this article, let’s take a closer look at three tech companies and two others that are making headlines today. The companies in question are Tesla Motors Inc (NASDAQ:TSLA), QUALCOMM, Inc. (NASDAQ:QCOM), NXP Semiconductors NV (NASDAQ:NXPI), SUPERVALU INC. (NYSE:SVU), and Deutsche Bank AG (USA) (NYSE:DB). In this article, we’ll discuss the latest news surrounding these stocks and will assess the hedge fund sentiment towards them.
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).
Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk quashed some recent analyst talk (with the professionals at Pacific Crest Securities chief among them) about the car company potentially using discounts to achieve sales targets, saying the following in a memo to Tesla employees: “However, there can never – and I mean never – be a discount on a new car coming out of the factory in pristine condition, where there is no underlying rationale.” Tesla is expected to report its third-quarter vehicle delivery numbers as early as next week and a good number could help to secure more positive votes for the merger between Tesla and SolarCity Corp (NASDAQ:SCTY) from shareholders. Of the around 749 funds that we track, 36 held around 4.00% of Tesla Motors Inc (NASDAQ:TSLA)’s float on June 30.
QUALCOMM, Inc. (NASDAQ:QCOM) and NXP Semiconductors NV (NASDAQ:NXPI) both surged on Thursday and extended their gains on Friday after The Wall Street Journal reported that the former is in talks to acquire the latter in a deal likely valued at over $30 billion. According to the article, if a deal is struck, it could be ‘in the next two to three months’. With interest rates low for potentially only a few more quarters, there has been a wave of M&A in the semi-conductor industry as various companies merge to unlock synergies and realize more economies of scale. With the rally on the back of the news, the market is optimistic that the combination of the two could unlock value for both companies’ shareholders if a deal ever gets done despite the considerable integration risks between the two. Among the funds we track, 48 funds were long QUALCOMM, Inc. (NASDAQ:QCOM) and 57 funds held shares of NXP Semiconductors NV (NASDAQ:NXPI) at the end of the second quarter.
Click next to see why SUPERVALU and Deutsche Bank AG (USA) are in the spotlight.