All eyes are on the Federal Reserve today, as investors await the central bank’s decision on whether to begin the process of raising interest rates in the near-term.
Among the stocks that are also attracting investors’ eyeballs today are Wells Fargo & Co (NYSE:WFC), Community Health Systems (NYSE:CYH), Apollo Global Management LLC (NYSE:APO), Oclaro, Inc. (NASDAQ:OCLR), and General Motors Company (NYSE:GM). In this article, we’ll find out why the five stocks are trending and use the latest 13F data to determine how top hedge funds are positioned in each stock.
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).
Embattled Wells Fargo & Co (NYSE:WFC) CEO John Stumpf took on a more contrite tone recently, saying that, “I am deeply sorry” and that the company “should have done more sooner to eliminate unethical conduct and unintended incentives for that conduct to occur. Even one unauthorized account is one too many.” The comments are in relation to some former employees of Wells Fargo having opened up around 2 million unauthorized accounts to juice numbers and meet sales targets. After extracting an apology, lawmakers are now wondering why the CEO hasn’t mentioned trying to claw back pay for some of the managers that may have had something to do with the shady practices. Wells Fargo bulls hope the scandal will fade over time, as Wells Fargo’s management continues to try and satisfy Congress and the media. Warren Buffett‘s Berkshire Hathaway owned around 480 million shares of Wells Fargo & Co (NYSE:WFC) at the end of June.
After falling sharply on Monday, Community Health Systems (NYSE:CYH) shares have bounced back in extended market trading on the back of a Reuters report. According to the article, Apollo Global Management LLC (NYSE:APO) is among the interested parties that are currently in talks to purchase the assets of Community Health Systems. CHS said on Monday that it was in the early stages of exploring its options with financial sponsors, as well as other potential alternatives, which does not necessarily mean a sale. There is also no guarantee that a deal between Apollo Global and Community Health Systems will go through.
Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 33 funds owned $280.14 million in Community Health Systems (NYSE:CYH) shares on June 30, which accounted for 20.40% of the float, down from 42 funds with $493.04 million in holdings on March 31. Meanwhile, 18 funds were long $220.51 million worth of Apollo Global Management LLC (NYSE:APO) shares at the end of the second quarter.
On the next page, we’ll find out why Oclaro and GM are trending.