Here’s What You Need to Know About These Five Stocks Trending Today

After a disappointing last week, U.S. stocks are trending higher on Monday, pushed up by telecommunications, utilities and consumer staples stocks. In this article we’ll take a look at some of the stocks that have led today’s advance, namely JD.Com Inc(ADR) (NASDAQ:JD), ICICI Bank Ltd (ADR) (NYSE:IBN), Oracle Corporation (NYSE:ORCL), Ericsson (ADR) (NASDAQ:ERIC) and Cisco Systems, Inc. (NASDAQ:CSCO). Let’s find out what got investors talking about these stocks today.

But why do we track hedge fund activity? From one point of view we can argue that hedge funds are consistently underperforming when it comes to net returns over the last three years, when compared to the S&P 500. But that doesn’t mean that we should completely neglect their activity. There are various reasons behind the low hedge fund returns. Our research indicated that hedge funds’ long positions actually beat the market. In our back-tests covering the 1999-2012 period hedge funds’ top small-cap stocks edged the S&P 500 index by double digits annually. The 15 most popular small-cap stock picks among hedge funds also bested passive index funds by around 53 percentage points over the 37 month period beginning from September 2012 (read the details here).

First up is JD.Com Inc (ADR) (NASDAQ:JD), one of China’s top e-commerce firm. The company reported third quarter financial results before market open today and one of the highlights is the 52% increase in revenues year-over-year, in line with analysts expectations. JD.Com posted 44.1 billion yuan ($6.9 billion) and a net loss of 530.8 million yuan ($83.3 million), as increased marketing expenses and other costs have taken their toll on the bottom line. Investors were unfazed by the company reporting a first ever quarter-on-quarter decline in revenues and have pushed the stock higher this morning, currently up by roughly 8%.

At the end of the second quarter, approximately 25% of the company’s common stock was held by 75 hedge funds, up from 68 at the end of March. Legendary investor Julian Robertson is very bullish on the stock and has made it his number one bet at the end of June. His fund, Tiger Management, reported ownership of 3.13 million shares in its latest 13F filing.

Shareholders of ICICI Bank Ltd (ADR) (NYSE:IBN) should be rather pleased this morning, as the stock has opened higher and is currently up by approximately 2.7%. The company announced the sale of 6% of its stake in ICICI Prudential Life Insurance Company Limited, a co-venture with Prudential Public Limited Company (ADR) (NYSE:PUK), to Premji Invest and Compassvale Investments Pte Ltd. Following this transaction, ICICI Bank will be left with roughly 68% of the insurance company. The Mumbai, India-based baking company has also announced the appointment of Ms. Vishakha Mulye to its board of directors. Ms. Mulye is currently managing ICICI Venture Funds Management Company, a wholly owned subsidiary of ICICI Bank.

Hedge funds have an insignificant presence among the shareholders of ICICI Bank Ltd (ADR) (NYSE:IBN), as 29 funds held 1.7% of its outstanding stock at the end of June. Ken Fisher is optimistic about the prospects of the company, having slightly increased his holding to 10.3 million shares, as reported in Fisher Asset Management’s latest 13F filing.

Analysts at Goldman Sachs believe Oracle Corporation (NYSE:ORCL) is poised for a rally, having tanked by 16% so far this year. In a note to investors, Goldman’s Heather Bellini has reiterated the company’s Buy rating, noting that Oracle has been added to the firm’s “Conviction Buy List.” Bellini also raised the price target to $47 from $45, citing positive growth outlook for Oracle’s cloud business. She also added that “if Oracle is successful in attaining fiscal year 2016 bookings targets, we would expect management to guide to accelerating cloud revenue growth in fiscal year 2017 and with gross margins expanding, we believe fiscal year 2016 will mark the bottom in non-GAAP operating margins.”

Although it is among the hedge funds’ favorite stocks, only 4.5% of Oracle Corporation (NYSE:ORCL)’s shares were held by 58 elite funds at the end of the second quarter. Despite a 6% trim in its stake, Eagle Capital Management, run by Boykin Curry, was the largest holder of the stock at the end of June with 42.4 million shares. Jean-Marie Eveillard is also betting big on the software giant, having boosted First Eagle Investment Management’s investment by 2% to 38.1 million shares over the quarter.

The recent announcement of a partnership between Ericsson (ADR) (NASDAQ:ERIC) and Cisco Systems, Inc. (NASDAQ:CSCO) was bound to give birth to rumors of a potential merger or takeover bid. And Ericsson was quick to squash any speculation, with CEO Hans Vestberg stating that “talks leading up to the partnership announcement have been ongoing for a year and there have not been any discussions whatsoever on a merger or an acquisition.” On November 9, the two networking companies have announced a partnership for development of future networks, including joint efforts in reshaping and transforming networks, as well as collaboration in key emerging markets.

Peter Rathjens, Bruce Clarke and John Campbell see great upside potential in Ericsson (ADR) (NASDAQ:ERIC), having recently upped Arrowstreet Capital’s stake by 19% to 15.2 million shares, worth in excess of $157 million. In general, Ericsson is not very popular among the funds we follow, as only 12 of them reported a long position at the end of June, holding less than 1% of common stock. Cisco Systems, Inc. (NASDAQ:CSCO), on the other hand, has much more admirers, with 72 hedge funds had the stock in their portfolio at the end of the second quarter. Donald Yacktman and his fund, Yacktman Asset Management, have continued to reduce their investment in Cisco during the third quarter, dumping nearly 15% of their stake. In its latest 13F filing, the fund reported ownership of 36.1 million shares valued at $947 million.

Disclosure: none.