All three major indexes are in the red today, as the earnings results of several major companies including Apple Inc. (NASDAQ:AAPL) failed to meet expectations.
Among the stocks that traders are watching are Toyota Motor Corp (ADR) (NYSE:TM), Martin Marietta Materials, Inc. (NYSE:MLM), Vulcan Materials Company (NYSE:VMC), International Business Machines Corp. (NYSE:IBM), and Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA). In this article, we are going to take a closer look at the events that put these companies in the spotlight and will assess the hedge fund sentiment towards them.
At Insider Monkey, we track around 750 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).
Toyota Motor Corp (ADR) (NYSE:TM) announced on Wednesday that it is recalling around 5.8 million vehicles in China, Japan, Europe, and other overseas locations due to potentially faulty airbag inflators manufactured by Takata Corp. The recall affects about 820,000 cars in China, 1.47 million in Europe, and 1.16 million in Japan and includes certain years and makes of the popular Corolla brand. Given that the market has already priced much of the news in, Toyota shares are only marginally down in the morning. Phill Gross and Robert Atchinson‘s Adage Capital Management owned 1.32 million shares of Toyota Motor Corp (ADR) (NYSE:TM) at the end of June.
Traders are watching Vulcan Materials Company (NYSE:VMC) and Martin Marietta Materials, Inc. (NYSE:MLM) after Rohit Seth of Suntrust upgraded both stocks to ‘Buy’ from ‘Hold’, saying that the two has positive catalysts ahead (in his opinion). In particular, Seth thinks the outlook for materials demand is rosy given the potential that Hillary Clinton will increase spending on America’s infrastructure (Donald Trump has also said that he wants to rebuild America’s infrastructure as well). Seth has a $206 price target of Martin Marietta, up from the previous $170 per share. The analyst has a $129 price target on Vulcan, up from the previous $110 per share. Despite the upgrade, both stocks are slightly down due to broader market weakness. Of the 749 funds that we track, 37 were long Martin Marietta Materials, Inc. (NYSE:MLM) and 42 investors held shares of Vulcan Materials Company (NYSE:VMC) at the end of the second quarter.
On the next page, we find out why International Business Machines Corp and Teva Pharmaceutical Industries Ltd are in the spotlight.