With crude oil and the broader indexes modestly in the red this morning, five companies, Bed Bath & Beyond Inc. (NASDAQ:BBBY), Valeant Pharmaceuticals Intl Inc (NYSE:VRX), ConAgra Foods Inc (NYSE:CAG), Wynn Resorts, Limited (NASDAQ:WYNN), and Lexmark International Inc (NYSE:LXK) are trending for various reasons. Let’s take a closer look at these stocks and peer into hedge fund holdings in them to see how the smart money crowd has been trading them.
At Insider Monkey, we track around 785 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).
Bed Bath & Beyond Inc. (NASDAQ:BBBY) is 5% in the green this morning after the company reported solid earnings for the fourth quarter of fiscal year 2015. For the period, the retailer made $1.85 per share on revenue of $3.42 billion, beating estimates by $0.04 per share and $30 million, respectively. For the full fiscal year, the company earned $5.10 per share on revenue of $12.1 billion. The solid earnings weren’t the only good news for shareholders, however, as Bed Bath & Beyond Inc. (NASDAQ:BBBY) also declared a quarterly dividend for the first time, of $0.125 per share, which currently provides a dividend yield of just under 1%. 23 elite funds in our system owned about 5.8% of the retailer’s float at the end of December, a sharp decrease from 33 funds at the end of September.
Valeant Pharmaceuticals Intl Inc (NYSE:VRX) shares have surged 6% higher on the news that the company successfully won a commitment from the majority of its financial lenders to waive a default and ease some financial restrictions on its loans. In return for the waiver, Valeant has agreed to pay an additional one percentage point in interest on more than $11 billion of its term loans. The company will also pay a 50-basis-point fee to the lenders that agreed to the waiver. The waiver should give Valeant more breathing room to right its ship and control its debt. Valeant Pharmaceuticals Intl Inc (NYSE:VRX) was in the portfolios of 83 elite funds at the end of the fourth quarter, down by five from the end of the third quarter. Bill Ackman’s Pershing Square is one of the largest shareholders of the company and now sits on its board.
On the next page, we examine why ConAgra Foods, Wynn Resorts, and Lexmark International are trending this morning.