The markets are quiet today as all three indexes are modestly lower and crude is only down by 0.3%.
Among the stocks in the spotlight are Mylan NV (NASDAQ:MYL), Transocean LTD (NYSE:RIG), Netflix, Inc. (NASDAQ:NFLX), Seadrill Ltd (NYSE:SDRL), and Tiffany & Co. (NYSE:TIF). Let’s take a closer look at these companies and see what the smart money investors from our database think about them.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).
Mylan Cuts EpiPen Prices
After a blistering New York Times article and Democratic Presidential nominee Hillary Clinton calling for the company to cut prices, Mylan NV (NASDAQ:MYL) announced that it will reduce prices on its EpiPens by as much as 50% in some instances. Although EpiPen is an old product, Mylan has raised the price of the essential epinephrine injection by over 400% over the past few years. The unjustified nature of the price increases attracted political and media scrutiny that led many investors to fear Mylan could undergo a Valeant Pharmaceuticals Intl Inc (NYSE:VRX)-type slide (Mylan shares fell sharply yesterday on the back of those fears). Fortunately, Mylan has nipped the problem in the bud, and its shares are well in the green today. A total of 44 funds from our database had a bullish position in Mylan NV (NASDAQ:MYL) at the end of the second quarter, down by seven from the previous quarter.
Analyst Upgrade at Transocean
Offshore driller Transocean LTD (NYSE:RIG) is trading higher after analysts at Citi upgraded the stock to ‘Neutral’ from ‘Sell’ and upped its price to $11 per share. The analysts like how Transocean has cut costs and how the company’s backlog is holding up better than many of its peers. However, for the stock to do well in the medium term, Transocean needs oil demand to rise higher and possibly for OPEC to cut production. Carl Icahn’s Icahn Capital LP owned over 21 million shares in Transocean LTD (NYSE:RIG) on June 30.
On the next page, we examine Netflix, Seadrill Ltd, and Tiffany & Co.