Why Traders Are Watching Tesla, SolarCity, Allergan & Other Stocks Today

The markets are quiet this Monday as traders analyze the latest batch of earnings releases this week. In this way, the Dow Jones, S&P 500, and NASDAQ indexes opened in the red, alongside a decline in oil prices.

In this article, we find out why Tesla Motors Inc (NASDAQ:TSLA), SolarCity Corp (NASDAQ:SCTY), Apple Inc. (NASDAQ:AAPL), Danaher Corporation (NYSE:DHR), and Allergan plc Ordinary Shares (NYSE:AGN) are in the spotlight and see how the world’s greatest investors are positioned towards each stock.

At Insider Monkey, we track around 770 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).

Musk Companies Moving Closer

According to Reuters, Tesla Motors Inc (NASDAQ:TSLA)‘s bid for SolarCity Corp (NASDAQ:SCTY) is moving closer to the finish line. The two companies are said to be in the final stages of due-diligence on the other, and the two could potentially agree on final terms of a deal over the next few days. Although the bid is closer to be completed, and SolarCity is seen as an integral part of Tesla’s plan to be an integrated energy and transportation company by Elon Musk, shareholders of both companies will still need to approve the deal. Because Elon Musk, who owns a substantial chunk of both companies has recused himself, it is unclear whether Musk’s goal of combining the two companies will work out. Many Tesla shareholders don’t think a SolarCity acquisition would unlock any meaningful synergies. The buyout could also make it harder for Tesla to achieve its goal of producing half a million vehicles a day by 2018. SolarCity shareholders are for the moment optimistic about the deal, as its shares are 3% in the green while Tesla shares are up by 0.8%.

Among the funds we track, 39 funds owned $1.08 billion worth of Tesla Motors Inc (NASDAQ:TSLA)’s stock, which accounted for 3.60% of the float on March 31. In the same time frame, 23 funds reported stakes in shares of SolarCity Corp (NASDAQ:SCTY) as of the end of the first quarter, down by six funds from the previous quarter.

iPhone Nearing Major Milestone

Although iPhone sales are no longer growing as quickly as they used to, Apple Inc. (NASDAQ:AAPL) is nevertheless nearing a major milestone for the product. Experts predict that Apple will sell its one-billionth iPhone sometime this week as consumers continue to pick the iPhone over other comparable phones at lower price points. If the internet rumors are true, iPhone demand could increase in September when Apple is purportedly set to release the newest iteration of the product, the iPhone 7. Apple could use the increased demand as its shares are down 5% year-to-date. Ken Fisher’s Fisher Asset Management owned more than 11.3 million shares of Apple Inc. (NASDAQ:AAPL) at the end of June, according to its latest 13F filing.

On the next page, we take a closer look at why Danaher Corporation, and Allergan.

Danaher Reports

Danaher Corporation (NYSE:DHR) share are 0.2% in the green after the company reported EPS of $1.25 on revenue of $5.79 billion for its second quarter, beating the consensus estimates by $0.03 per share and $30 million, respectively. Revenue went up by 16.5% year-over-year and operating cash flow from continuing operations jumped by 26% year-over-year to $2.1 billion. Management expects full-year 2016 EPS to come in at $3.53-$3.60 and GAAP EPS to be in the range of $2.79 to $2.86. A total of 46 investors tracked by Insider Monkey had a bullish position in Danaher Corporation (NYSE:DHR) at the end of March, up by six funds from the previous quarter.

Analyst Likes Allergan 

Traders are watching Allergan plc Ordinary Shares (NYSE:AGN) today after analysts at Credit Suisse initiated coverage on the stock with an ‘Outperform’ rating, mainly due to Allergan’s strong pipeline of drugs. The analysts have a 12-month price target of $327, giving shares a 30% upside from current prices. Many analysts like Allergan’s executive team and the company’s shareholder-friendly up-to-$10 billion buyback authorization. At the end of the first quarter, 170 funds owned shares of Allergan plc Ordinary Shares (NYSE:AGN), which makes Allergan the most popular stock among investors in our database.

Disclosure: None