Here’s why Microsoft, ImmunoGen, and Three Other Stocks Are Trending on Tuesday

The three major index futures and crude are once again in the red on Tuesday amid Brexit fears. If Britain leaves the EU, there could be an unexpected financial shock that causes corporate earnings to fall and demand for crude to decline. The fear is driving a ‘risk-off’ approach to the market that has kept the indexes and crude in the red for now. Among the stocks trending this morning are ImmunoGen, Inc. (NASDAQ:IMGN), Revance Therapeutics Inc (NASDAQ:RVNC), Microsoft Corporation (NASDAQ:MSFT), LinkedIn Corp (NYSE:LNKD), and Amazon.com, Inc. (NASDAQ:AMZN). Let’s take a closer look why these stocks are in the spotlight today and see what elite funds think about them.

We believe that imitating hedge funds and other large institutional investors can be helpful in identifying stocks capable of outperforming the broader market. Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).

ImmunoGen Down on Offering

ImmunoGen, Inc. (NASDAQ:IMGN) is off by 11% in pre-market after the company proposed a $100 million convertible senior note offering due 2021. The notes will be offered to only qualified institutional buyers and the sale is expected to close on June 20. ImmunoGen intends to use the net proceeds for its operations, including clinical trial expenditures, R&D, and other purposes. The exact pricing of the convertible notes has not been released yet. The number of funds tracked by Insider Monkey with holdings in ImmunoGen, Inc. (NASDAQ:IMGN) rose by one quarter-over-quarter to 13 at the end of March.

Revance Declines on Study Results

Revance Therapeutics Inc (NASDAQ:RVNC) shares are 23% in the red after a Phase 3 study showed the company’s lead product candidate, RT001, failed to achieve its co-primary and other endpoints for the potential treatment of patients with moderate to severe lateral canthal lines, or crow’s feet. The company will discontinue the development of RT001 for crow’s feet or for axillary hyperhidrosis. The company will instead focus its efforts on RT002 for the potential treatment of glabellar lines and other indications. Based on its current development plans, Revance Therapeutics Inc (NASDAQ:RVNC) expects its cash and investments to be enough to fund operations until around the second quarter of 2018. A total of 10 funds from our database were long Revance Therapeutics Inc (NASDAQ:RVNC) at the end of the first quarter, according to the latest round of 13F filings.

On the next page, we will take a closer look at Microsoft Corporation, LinkedIn Corp, and Amazon.

Microsoft’s Debt Rating Under the Microscope

Credit ratings agency Moody’s has put Microsoft Corporation (NASDAQ:MSFT)‘s Aaa senior unsecured rating under review for downgrade after the software giant agreed to purchase LinkedIn Corp (NYSE:LNKD) for $26.2 billion in cash. Although the acquisition could improve Microsoft’s cloud based services platform, the deal will increase Microsoft’s gross debt-to-EBTIDA ratio to around 2x, or 0.5x more than what Moody’s considers is acceptable for a triple A credit rating. The downgrade might not cost Microsoft much in interest fees, however, seeing as analysts at Moody’s have said any downgrade would ‘likely be limited to one notch’.  Overall, 144 funds in our database had a long position in Microsoft Corporation (NASDAQ:MSFT), while 41 funds were long LinkedIn Corp (NYSE:LNKD) at the end of the first quarter. Microsoft is also in the news after introducing a new Xbox at E3 conference.

FAA fine for Amazon.com

Amazon.com, Inc. (NASDAQ:AMZN) is in the spotlight today after the U.S. Federal Aviation Administration proposed fining the company $350,000 for shipping a product that purportedly violated safety regulations and injured several people handling the package. If enforced, the fine will be the largest fine imposed by the FAA on Amazon in the e-commerce giant’s history. Although the fine isn’t very much relative to Amazon’s revenues or profits, the company’s relationship with the FAA is something to closely monitor as Amazon potentially expands into the logistics business in the near future. A total of 133 funds tracked by Insider Monkey owned shares of Amazon.com, Inc. (NASDAQ:AMZN) at the end of the first quarter, down eight funds from the previous quarter.

Disclosure: none