Crude futures are in the red after the API reported a massive 9.3 million-barrel build on Tuesday. On the other hand, EIA inventories data showed an increase of 14.4 million barrels.
In this article, let’s find out why Tesla Motors Inc (NASDAQ:TSLA), SolarCity Corp (NASDAQ:SCTY), Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Wal-Mart Stores, Inc. (NYSE:WMT), and Herbalife Ltd. (NYSE:HLF) are trending and take a look at the relevant hedge fund sentiment concerning them.
While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).
With the shareholder vote on whether to approve or to reject the merger between Tesla Motors Inc (NASDAQ:TSLA) and SolarCity Corp (NASDAQ:SCTY) approaching, Elon Musk is again doing all that he can to convince shareholders of the benefits of the combination. Specifically, in contrast to some bearish investors, Musk and Co believes SolarCity will “add more than half a billion dollars in cash to Tesla’s balance sheet over the next 3 years”.
Tesla went on to elaborate:
“SolarCity’s business is unfamiliar to some and its financials are often misinterpreted. As a result, it’s important to emphasize the financial health of SolarCity’s business. The bottom line is that we expect the acquisition of SolarCity to bring significant financial benefits to the combined company. In Q4 alone, we expect SolarCity to add to Tesla’s cash position.”
Due to that belief, Tesla believes it doesn’t have any economic need to raise more capital now. The date for the vote is on November 17. Of the 749 funds that we track, 26 were long SolarCity Corp (NASDAQ:SCTY) and 36 funds held shares of Tesla Motors Inc (NASDAQ:TSLA) at the end of the second quarter.
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) is in the spotlight after the company confirmed that it is in discussions with various third parties for divestitures including but not limited to Salix, which the company bought for a valuation of $14.5 billion last year. Valeant shares popped 33% on Tuesday on the back of the rumor that it is talking with Takeda over the sale of its Salix segment for around $10 billion. Shares have given back around 6% in morning trading as traders remain cautious on the stock. Although a sale of Salix would help reduce Valeant’s debt burden, the stock’s fundamentals still have a ways to go before it can be regarded as a stock with average risk. Bill Ackman’s Pershing Square owned over 21 million shares of Valeant Pharmaceuticals Intl Inc (NYSE:VRX) at the end of June.
On the next page, we examine Wal-Mart Stores, and Herbalife Ltd.