Why United Natural Foods, Wells Fargo, Intersil, and Two Others Are Trending On Tuesday

After falling sharply on Friday, volatility is lower this week as some Fed officials have given somewhat contradictory signals on the timeline of an eventual interest rate hike. On one hand, the President of the Federal Reserve Bank of Atlanta, Dennis Lockhart, gave his personal opinion that there should be “serious discussion” about whether the economy is strong enough to absorb a hike. On the other hand, Federal Reserve governor Lael Brainard hinted that she was on the dovish side and espoused “prudence” in terms of interest rate hikes.

In this article we’ll analyze why traders are talking about Blue Buffalo Pet Products Inc (NASDAQ:BUFF), United Natural Foods, Inc. (NASDAQ:UNFI), Chesapeake Energy Corporation (NYSE:CHK), Wells Fargo & Co (NYSE:WFC), and Intersil Corp (NASDAQ:ISIL) today. We’ll also see how hedge funds are positioned in the five stocks using the latest 13F data.

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Blue Buffalo Pet Products Inc (NASDAQ:BUFF) is in the spotlight after the company announced that some of its stockholders intend to offer 14.3 million shares of the company for sale in an underwritten secondary offering. Because it isn’t the one doing the selling, Blue Buffalo will not receive any of the proceeds. The offering is expected to close on September 16. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 26 owned shares of Blue Buffalo Pet Products Inc (NASDAQ:BUFF) at the end of June. Shares of the company are flat in pre-market trading.

Traders are talking about United Natural Foods, Inc. (NASDAQ:UNFI) after the company reported stronger-than-expected fourth quarter of fiscal year 2016 results. For the period, United Natural Foods earned $0.70 per share, or $0.07 better than expectations. Revenue was $2.22 billion, up by 7.8% year-over-year, and in-line with estimates. Adjusted net income for the full 2016 fiscal year was $2.59 per share (versus $2.85 per share for fiscal year 2015) on sales of $8.47 billion (up by 3.5% year-over-year). In terms of guidance, UNF’s management expects GAAP EPS of $2.53-to-$2.63 for fiscal 2017 on revenue of $9.43 billion-to-$9.6 billion. Ken Fisher‘s Fisher Asset Management was long 741,170 shares of United Natural Foods, Inc. (NASDAQ:UNFI) at the end of the second quarter, up by 1% from the number of shares it was long at the end of the first quarter.

On the next page, we’ll examine why Chesapeake Energy, Wells Fargo, and Intersil Corp have traders’ attention this morning.

Chesapeake Energy Corporation (NYSE:CHK) has received yet another thumbs up, this time from analysts at SunTrust, who raised their price target on the stock to $11 from $8 and kept their ‘Buy’ rating on it. The analysts like how Chesapeake is improving its efficiency in terms of lowering well costs. They also like how Chesapeake has largely put its liquidity issues to bed, as the company only has around $660 million of debt/credit due in 2016 and 2017. 31 funds that we track, including Carl Icahn‘s Icahn Capital LP, were long Chesapeake Energy Corporation (NYSE:CHK) at the end of the second quarter.

Perhaps in further fall-out from its recent $185 million settlement with U.S. regulators over its previous questionable tactics, which involved creating over 2 million fake accounts, Wells Fargo & Co (NYSE:WFC) has told some of its employees to halt the cross-selling of some of the firm’s products to customers. One reason for Wells Fargo’s questionable sales tactics was due to the push from management to increase cross-selling. 88 funds followed by Insider Monkey owned shares of Wells Fargo & Co (NYSE:WFC) at the end of the second quarter, down by two funds quarter-over-quarter.

Last but not least, Intersil Corp (NASDAQ:ISIL) is on traders’ tongues after Renesas Electronics agreed to buy it for $22.50 in cash per share, representing an aggregate equity value of around $3.2 billion. The deal has been unanimously approved by the Boards of both companies and is expected to close in the first-half of 2017. According to our records, hedge funds have largely missed out on today’s nearly 10% jump. The number of funds in our system with holdings in Intersil Corp (NASDAQ:ISIL) fell by two during the second quarter to 14 on June 30. Those 14 funds held just 3.80% of the company’s stock. While today’s jump was modest as far as acquisitions go, Intersil’s shares have gained 60% in the third quarter.

Disclosure: None