Given that the Federal Reserve has chosen to hold interest rates steady for a few more months and the broader markets are in rally mode, it’s not surprising that various analysts on the Street are bullish on some of the market’s leading names.
In this article, we’ll take a look at some of the latest positive analyst commentary/upgrades/price hikes for Analogic Corporation (NASDAQ:ALOG), Mylan NV (NASDAQ:MYL), Apple Inc. (NASDAQ:AAPL), Alibaba Group Holding Ltd (NYSE:BABA), and Amazon.com, Inc. (NASDAQ:AMZN). We’ll also use the latest 13F data to see how successful hedge funds are positioned in each stock.
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).
Analogic Corporation (NASDAQ:ALOG) shares are up 1.77% today in part due to positive commentary from Brean Capital analyst Jason Wittes, who raised his target price on the stock to $100 per share from $90. Wittes thought Analogic’s fiscal fourth quarter earnings were solid, and he expects the company’s revenue to grow and margins to expand in the second half of calendar year 2016. Just for reference, Analogic reported fiscal fourth quarter earnings of $1.02 per share on revenue of $138.1 million, the latter figure being down by 10.6% year-over-year. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 11 of them owned $102.73 million of Analogic Corporation (NASDAQ:ALOG) shares at the end of June, accounting for 10.50% of the float.
Count analysts at Argus as believers in Mylan NV (NASDAQ:MYL). Although the healthcare giant is still being punished in the media and on the Hill due to its previous and controversial EpiPen price hikes, Argus analyst Jacob Kilstein thinks Mylan has fallen so much (down by 22% year-to-date when EpiPen only accounts for around 20% of its profits) that the stock now offers an attractive entry point. Although it is true that Mylan’s generic $300 EpiPen will eat into branded sales that cost twice as much, the generic will also help ward off potential competitors in the future. To Kilstein, Mylan is undervalued and is a ‘Buy’. 44 funds in our system agreed as of June 30, as they were all long Mylan NV (NASDAQ:MYL) at the end of the second quarter.
On the next page, we’ll find out which analysts were giving the thumbs up to Apple, Alibaba, and Amazon, and why.
Apple Inc. (NASDAQ:AAPL) is 0.8% in the green today as some buyers likely bought due to notes from RBC Capital analyst Amit Daryanani, who bumped up his Apple price target to $125 per share from $120. One reason for the hike is that RBC Capital’s survey of over 6,000 customers showed that consumers are favoring the larger iPhone model more and more. Daryanani thinks the shift could be positive enough to allow Apple’s combined average selling price for the iPhone 7 and iPhone 7 Plus to beat the Street’s expectations. In addition, the survey showed a stronger preference for ancillary services and products, which again could help Apple beat Wall Street estimates. Warren Buffett‘s Berkshire Hathaway raised its stake in Apple Inc. (NASDAQ:AAPL) by 56% in the second quarter, to over 15.2 million shares at the end of June.
Alibaba Group Holding Ltd (NYSE:BABA) hit a 52-week high on Thursday after analysts at UBS raised their price target on the stock to $124 from $107. The analysts like Alibaba’s increasing focus on Cloud/Media and think Alibaba has a long runway of growth in terms of potential e-commerce rate raising and increasing brand advertising monetization. The smart money was more optimistic on Alibaba in the second quarter, as the number of funds in our system with holdings in Alibaba Group Holding Ltd (NYSE:BABA) rose by two to 69 by the end of June.
Like Alibaba, Amazon.com, Inc. (NASDAQ:AMZN) has also surged to a 52-week high on the back of positive analyst commentary, this time from analysts at Argus, who raised their rating on Jeff Bezos’ firm to ‘Buy’ from ‘Neutral’. The analysts think the market isn’t giving full credit to Amazon’s growth, which is unparalleled for an e-commerce company of Amazon’s size. For long-term investors, Argus thinks Amazon shares should be bought on weakness and accumulated, as current levels offer attractive entry points. 145 funds that we track were bullish on Amazon.com, Inc. (NASDAQ:AMZN) as of the most recent 13F reporting period, up by 12 funds from the previous reporting period.