Although all eyes are on the elections in the United States this week, major developments in Europe are causing substantial movement in several major stocks. Among the stocks moving or in the spotlight are Facebook Inc. (NASDAQ:FB), Alphabet Inc. (NASDAQ:GOOG), Amazon.com Inc. (NASDAQ:AMZN), General Electric Company (NYSE:GE), and
SunPower Corporation (NASDAQ:SPWR). Let’s find out why traders are talking about each company.
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Tech giants Facebook Inc. (NASDAQ:FB), Alphabet Inc. (NASDAQ:GOOG), and Amazon.com Inc. (NASDAQ:AMZN) are each lower today and weighing on the NASDAQ after credit agency Moody’s stated that the proposed digital services tax in Britain could trim cash flow for big tech companies such as Facebook and Alphabet. If the law were to pass, the development would be ‘credit negative’ and blunt the positive benefits of the previous U.S. tax cuts. Although Amazon.com doesn’t make as much in Britain as Facebook or Alphabet, it could be negatively affected also. What’s new about the potential tax is that the levy is on revenue rather than profit. While the proposal is for 2% of revenue, it’s still a big chunk of cash that otherwise could go to shareholders. Britain isn’t alone as the EU is considering a similar levy of potentially 3%. If Britain or the EU imposes the potential taxes, other places could too.
Also hurting sentiment around the three stocks is the news that President Trump is ‘looking at’ whether the three tech giants are potentially violating any antitrust laws. Trump has been notoriously critical on Amazon, especially on the subject of delivery fees and taxes. Trump has also complained previously that there might be political bias among big Tech.
In terms of hedge fund sentiment, a total of 122 of the hedge funds tracked by Insider Monkey were bullish on Alphabet Inc (NASDAQ:GOOG), a change of 3% from one quarter earlier.
Among these funds, Eagle Capital Management held the most valuable stake in Alphabet Inc (NASDAQ:GOOG), which was worth $1814.7 millions at the end of the second quarter. On the second spot was Citadel Investment Group which amassed $1114.6 millions worth of shares. Moreover, Ancient Art (Teton Capital), Foxhaven Asset Management, and Guardian Point Capital were also bullish on Alphabet Inc (NASDAQ:GOOG), allocating a large percentage of their portfolios to this stock.
Meanwhile, there were 130 hedge funds in our database with Amazon.com Inc. (NASDAQ:AMZN) positions. Facebook Inc. (NASDAQ:FB) was in 193 hedge funds’ portfolios at the end of June. Warren Buffett previously said that he missed out on Amazon and Google.
In other news, General Electric Company (NYSE:GE) is trending after after John Inch of Gordon Haskett stated that the stock could dip to as low of a level as $5 per share. General Electric Company (NYSE:GE) has dissapointed investors due to its financial performance in the past, and when asked by investors what the ultimate downside is for GE is, Inch states, “On a free cash basis, and assuming that GE Capital does not ultimately face insolvency, we estimate GE could trade for $5 share.” Inch doesn’t believe GE can completely dismantle to truly realize the value of the sum of its parts because it has to maintain certain sales and assets to meet various debt requirements of GE Capital. Despite Inch’s opinion, shares of GE are up over 1% in late afternoon trading.
A total of 44 of the hedge funds tracked by Insider Monkey were bullish on General Electric Company (NYSE:GE), a change of -6% from one quarter earlier. On the other hand, there were a total of 52 hedge funds with a bullish position in GE at the beginning of this year.
SunPower Corporation (NASDAQ:SPWR) shares are 5% in the green after on the back of speculation that the NEA of China could increase the 2020 target for solar development to potentially 210 GW or even between 250-270 GW. Total installed capacity in China is around 165 GW as of September 2018. Although SunPower Corporation (NASDAQ:SPWR) isn’t a Chinese company, more demand for solar from China reduces its competition.