Unlike the previous Friday, the last day of this workweek looks relatively tame as many traders are less worried about an immediate interest rate hike.
Among the stocks Wall Street is focusing on today are Avis Budget Group Inc. (NASDAQ:CAR), Deutsche Bank AG (USA) (NYSE:DB), Apple Inc. (NASDAQ:AAPL), Marvell Technology Group Ltd. (NASDAQ:MRVL), and Tesla Motors Inc (NASDAQ:TSLA). Let’s take a closer look at the latest developments involving these companies and assess the smart money sentiment towards them.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).
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Avis Budget Group Inc. (NASDAQ:CAR) is trending today after the company announced it will replace Questar Corp in the S&P MidCap 400 index after the end of trading on Friday. Due to the index inclusion, some mutual funds/institutions will likely have to buy Avis Budget shares as part of their mandate. However, whether the anticipated buying has already been priced into Avis’ price is another question. Shares of the company have retreated 3.33% year-to-date and trade for 10 times forward earnings as some investors remain concerned about sector pricing. Seth Klarman’s Baupost Group established a new stake in Avis Budget Group Inc. (NASDAQ:CAR) of over 1.7 million shares during the second quarter.
Follow Avis Budget Group Inc. (NASDAQ:CAR)
Follow Avis Budget Group Inc. (NASDAQ:CAR)
Deutsche Bank AG (USA) (NYSE:DB)’s shares are in the red after the Wall Street Journal reported that the Justice Department had proposed the bank to pay a $14 billion fine to settle various mortgage-securities cases related to the financial crisis. The proposed Justice Department fine is multiples of what many investors previously expected (of around $2-$3 billion). Understandably, Deutsche Bank has refused to play ball, responding that “Deutsche Bank has no intent to settle these potential civil claims anywhere near the number cited.” Not many investors from our database were bullish on Deutsche Bank AG (USA) (NYSE:DB) in the second quarter, as only 15 reported a stake as of the end of June.
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Follow Deutsche Bank Ag (NYSE:DB)
On the next page, we examine Apple, Marvell Technology Group Ltd, and Tesla Motors.
