Following one of the best trading weeks so far in 2016, the U.S stock market is advancing further on Monday on the back of a growth in oil prices. In this article, we’ll take a look at some of the stocks that are in the spotlight today, including Lumber Liquidators Holdings Inc (NYSE:LL), Groupon Inc (NASDAQ:GRPN), Teck Resources Ltd (USA) (NYSE:TCK), Alcoa Inc (NYSE:AA), and Weight Watchers International, Inc. (NYSE:WTW). Aside from the news that surround these stocks, we are also going to assess the hedge fund sentiment towards these stocks.
We believe that imitating hedge funds and other large institutional investors can be helpful in identifying stocks capable of outperforming the broader market. Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see more details here).
First up is Lumber Liquidators Holdings Inc (NYSE:LL), whose stock is down by 20% on the back of a revised report from the Centers for Disease Control and Prevention (CDC), which revealed that the risk of cancer from some of the company’s laminate flooring products is higher than was previously estimated on February 10. After correcting the values to calculate for ceiling height, the new estimates project that the flooring products could cause cancer in 6-to-30 cases, per 100,000 people, triple the 2-to-9 cases were 100,000 that was previously projected. During the fourth quarter, Lumber Liquidators Holdings Inc (NYSE:LL) registered a slight increase in popularity among the funds that we track, with 15 investors holding long positions at the end of December, versus 13 funds a quarter earlier Among them, John W. Rogers’ Ariel Investments was the largest shareholder, reporting ownership of 556,035 shares in its latest 13F filing.
Next on our list is Groupon Inc (NASDAQ:GRPN), whose shares inched up 5% today continuing the trend that started on Friday on news that Alibaba Group Holding Ltd (NYSE:BABA) bought 33 million shares of the company, equal to 5.6% of the company. Analysts at Goldman Sachs are bullish on the company, as they have raised their price target on the stock to $3.9 from $3.5. Among the funds we follow, 20 reported long positions in Groupon Inc (NASDAQ:GRPN) as of the end of December, down by six funds from a quarter earlier. Billionaire Jim Simons’ Renaissance Technologies is long Groupon with 12.41 million shares at the end of December.