The US stock market plunged following Fed chair’s Janet Yellen’s speech at Jackson Hole, where she expressed confidence that interest rate hiked are expected in the near term. Meanwhile, oil traders are a bit conflicted after Iran said that it would cooperate with OPEC to stabilize the crude market while Saudi Arabia’s energy minister said, “We don’t believe any significant intervention in the market is necessary”.
Amidst the uncertain backdrop, five stocks, Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR), Splunk Inc (NASDAQ:SPLK), Brocade Communications Systems, Inc. (NASDAQ:BRCD), Tesla Motors Inc (NASDAQ:TSLA), and SolarCity Corp (NASDAQ:SCTY) are trending on the back of different developments. Let’s take a closer look at why each stock is in the spotlight and examine what the investors from our database think about 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).
Petrobras Cuts Workforce
Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) is in the spotlight today after Reuters reported that 6,100 of Petrobras workers had agreed to a voluntary layoff program. Approximately 12,000 of Petrobras employees, which account for 21% of the company’s workforce, are currently eligible for the voluntary program in total. If all the eligible employees accept, Petrobras would save 33 billion reais in salaries over four years. That would save Petrobras around $9 billion when factoring in the upfront costs of the layoffs, which Petrobras could use to pay down its debt. A total of 23 funds tracked by us were long Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) at the end of June, unchanged from the previous quarter.
Splunk Dives on Earnings
Although its fiscal second quarter was better than analyst estimates, Splunk Inc (NASDAQ:SPLK)’s shares are nevertheless 10% in the red. For the quarter ended July 31, Splunk posted earnings of $0.05 per share on revenue of $212.8 million, beating estimates by $0.02 and $12.28 million, respectively. Revenue rose by 43.5% year-over-year and Splunk’s management raised full-year total revenue guidance to the range of $910 million to $914 million from the previous range of $892 million to $896 million. However, the market was apparently expecting better numbers given Splunk’s 10% year-to-date rally. Of the around 750 funds in Insider Monkey’s database, the number of investors with holdings in Splunk Inc (NASDAQ:SPLK) rose by one quarter-over-quarter to 32 at the end of June.
On the next page, we find out why Brocade Communications Systems, Tesla Motors, and SolarCity Corp are buzzing.