Why Twitter, eBay, Alibaba, and Two Other Stocks Are Trending

At the beginning of second week of the fourth quarter, three technology stocks and two financial institutions are trending today.

In this article, we examine the reasons why eBay Inc (NASDAQ:EBAY), Twitter Inc (NYSE:TWTR), Alibaba Group Holding Ltd (NYSE:BABA), Citigroup Inc (NYSE:C), and Banco Santander, S.A. (ADR) (NYSE:SAN) are in the spotlight today. In addition, we will assess the hedge fund sentiment towards these stocks.

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).

Although some traders are anxious about the company’s market-share given Facebook Inc (NASDAQ:FB)’s recent launch of ‘Marketplace’, Barron’s is bullish on eBay Inc (NASDAQ:EBAY). Writer Jack Hough thinks shares of the venerable e-commerce company could rise by 25% in twelve months as eBay’s management fixes the website’s various problems (and re-platforms) to unlock growth. Given that expectations on the Street are low and eBay’s valuation is reasonable, Hough considers eBay is an ideal investment for contrarians. Jim Simons‘ Renaissance Technologies hiked its stake in eBay Inc (NASDAQ:EBAY) by 59% to just over 3 million shares during the second quarter.

Twitter Inc (NYSE:TWTR) shares are in the spotlight again after Bloomberg reported that Alphabet Inc (NASDAQ:GOOG), salesforce.com, inc. (NYSE:CRM), and Walt Disney Co (NYSE:DIS)
are all ‘unlikely to make a bid’ according to sources. Moreover, Twitter’s planned board meeting with some outside advisers concerning a potential sale was canceled according to the same sources cited by Bloomberg. If a buyer does not appear, the social media company might have to focus more on streaming live video and potentially make some divestments (and likely cost cuts). More top funds entered into Twitter than left during the second quarter. The number of funds from our database with holdings in Twitter Inc (NYSE:TWTR) rose by three quarter-over-quarter to 30 at the end of June.

On the next page, we find out why traders are talking about Alibaba Group Holding Ltd, Citigroup, and Banco Santander SA (ADR).Alibaba Group Holding Ltd (NYSE:BABA) is trending after Alibaba Pictures, a company partly owned by the Chinese internet giant, entered into a strategic partnership with Steven Spielberg’s Amblin Partners to finance and co-produce various films for the Chinese and global box office. Under the terms of the partnership, Alibaba Pictures will market and distribute Amblin films in the world’s second largest market for movies (likely through the company’s Youku Tudou and other distribution channels). Although the deal won’t make much of an impact in terms of Alibaba’s bottom line, it will afford the company some good-will in Beijing, which is very important. A total of 69 funds tracked by us owned shares of Alibaba Group Holding Ltd (NYSE:BABA) at the end of the second quarter, up by two funds from the previous quarter.

After selling its Brazilian consumer division to Itau Unibanco, Citigroup Inc (NYSE:C) announced that it had reached a definitive agreement to sell its consumer banking business in Argentina to Banco Santander, S.A. (ADR) (NYSE:SAN)‘s Argentina division, Banco Santander Rio, this weekend. The sale involves around $1.4 billion in assets and includes personal loans, credit cards, deposit accounts, as well as Citi Argentina’s retail operations. Citigroup does not expect the financial terms of the sale to be material to its overall earnings results. Among the funds in our database, 97 were long Citigroup Inc (NYSE:C) and 16 funds held shares of Banco Santander, S.A. (ADR) (NYSE:SAN) at the end of June.

Disclosure: None