On a day when the major indexes are each down by two-thirds of a percentage point, Delta Air Lines, Inc. (NYSE:DAL), Alere Inc (NYSE:ALR), Caterpillar Inc. (NYSE:CAT), Quest Diagnostics Inc (NYSE:DGX), and Anheuser Busch Inbev SA (ADR) (NYSE:BUD) are five of the stocks in the spotlight, for various reasons. In this article, we will take a closer look at the five companies and see how the world’s greatest investors are positioned in the shares of each of them.
Through extensive backtests, we have determined that imitating some of the stocks that a collection of top 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).
Delta Air Lines Orders New Planes
Delta Air Lines, Inc. (NYSE:DAL) made a big capital commitment today by ordering 37 new Airbus A321 aircraft for around $4.25 billion at list prices. The A321 aircraft will replace 116 MD-88 aircraft in Delta’s fleet. According to Airbus, the A321 ‘offers airline customers the best seat-mile costs of any single-aisle aircraft and seating capacities comparable to that of a widebody jetliner’ and will presumably be more fuel efficient on a per-seat basis, which should save Delta Air Lines money in the long run. David Tepper‘s Appaloosa Management LP was a top shareholder of Delta Air Lines, Inc. (NYSE:DAL) at the end of December. Delta shares are down by 1.77% in morning trading.
Alere Wants Merger to Proceed as Planned
Alere Inc (NYSE:ALR) shares are 9.7% in the red after its board of directors rejected a request by Abbott Laboratories (NYSE:ABT) to terminate its $5.8 billion deal to buy Alere. Abbott wants to terminate the deal in exchange for a break up fee of $30 million-to-$50 million. Abbott is having second thoughts after concerns over the accuracy of certain warranties and representations made by Alere were raised. Abbott recently inked a $25 billion deal to buy another healthcare company, St. Jude Medical, Inc. (NYSE:STJ). Jim Simons‘ Renaissance Technologies was one of the hedge fund shareholders of Alere Inc (NYSE:ALR) at the end of the fourth quarter.
On the next page we examine the latest happenings involving Caterpillar Inc, Quest Diagnostics Inc, and Anheuser Busch Inbev SA.
Caterpillar Continues Cost Cutting Efforts
Caterpillar Inc. (NYSE:CAT) is 0.2% in the green despite the broader market weakness after the company announced that it will lay off 820 employees and close five plants. The layoffs are part of Caterpillar’s overall plan to cut its workforce by as many as 10,000 positions and to consolidate or close around 20 facilities by 2019. Caterpillar has cut 5,300 positions so far. The company has had to make the layoffs because demand for Caterpillar’s machinery has dropped substantially due to the sluggish commodity prices. Of the 786 active funds that we track, 31 funds owned $997.53 million worth of Caterpillar Inc. (NYSE:CAT) shares on December 31, which accounted for 2.50% of the stock’s float.
Quest’s Zika Virus Test Receives Emergency Use Authorization
Quest Diagnostics Inc (NYSE:DGX) is trending after the FDA granted emergency use authorization for the company’s Zika virus test. Quest’s test would be the first from a commercial lab company to achieve such authorization. Quest plans to make the Zika test available to doctors next week. Given Quest Diagnostics Inc (NYSE:DGX)’s large size, it is unclear whether the emergency use authorization will mean much in the long run. Shares of Quest are down by 0.88% in morning trading. Cliff Asness’ AQR Capital Management more than tripled its position in the stock to 1.56 million shares during the fourth quarter.
Anheuser Busch Inbev Tries Harder to Win EU Approval
Anheuser Busch Inbev SA (ADR) (NYSE:BUD) is in the news after the company offered to sell more assets in order to win the European Union’s approval for the proposed merger between it and SABMiller. Anheuser-Busch is now willing to divest SABMiller’s Eastern European brewing assets as part of the company’s concessions to ensure that consumers are not hurt by the deal. Anheuser Busch Inbev SA (ADR) (NYSE:BUD) was in 36 hedge funds’ portfolios at the end of December among those in our database, down by 13 from the end of September. Shares of Anheuser Busch are down by 0.81% today.