Here’s Why These Five Stocks Are in Spotlight on Monday

The week started with big news as  Verizon Communications Inc. (NYSE:VZ) agreed to acquire Yahoo! Inc. (NASDAQ:YHOO), confirming the rumors that have been trending last week. Nevertheless, as the earnings season continues, the market opened lower.

Without further ado, let’s take a closer look at the Yahoo/Verizon deal, as well as analyze some other stocks in the spotlight today, particularly, Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY), AMC Entertainment Holdings Inc (NYSE:AMC), and Carmike Cinemas, Inc. (NASDAQ:CKEC). In addition, we are going to take a look at what the investors from our database think about the companies in question.

Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).

Verizon is the Winner

The Yahoo! Inc. (NASDAQ:YHOO) internet property sweepstakes is over and Verizon Communications Inc. (NYSE:VZ) is officially the winner. According to a press release, the phone giant officially announced today that it will buy Yahoo’s operating business for $4.83 billion in cash in a deal that is expected to close in the first quarter of 2017. Although the transaction includes Yahoo’s real estate (traders did not expect the deal to include patents or real estate), the sale does not include Yahoo’s cash, the stake Yahoo Japan, Yahoo’s convertible notes, or Yahoo’s non-core patents. Yahoo intends to return much of the net cash raised from the deal to shareholders at the appropriate time, while Verizon intends to unlock substantial synergies between Yahoo’s core properties and Verizon’s AOL division. Yahoo shares are down 0.7% in the pre-market while Verizon shares are in the green on relatively light volume on the news.

According to our data, the number of elite funds with holdings in Yahoo! Inc. (NASDAQ:YHOO) jumped by 13 quarter-over-quarter to 97 at the end of March while the number of top funds with stakes in Verizon Communications Inc. (NYSE:VZ) rose by nine quarter-over-quarter to 61 at the end of March.

On the next page, we examine Nintendo, AMC Entertainment Holdings and Carmike Cinemas.

Japanese Traders Ask Whether Pokemon Go is a Fad

Momentum stock Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY) is in the spotlight today after shares of the company fell by around 17% in Japan on Monday. Japanese traders sold shares of the game maker after Nintendo warned that Pokemon Go’s financial impact on the company’s bottom line would be ‘limited’ and that it was not necessary to change annual guidance despite the game’s continued popularity. According to a Bloomberg article, analysts at Macquarie estimate that Nintendo has an ‘effective economic stake’ of 13% of the app.

AMC Raises Bid

In its quest to build a global cinema chain with scale and bargaining power, AMC Entertainment Holdings Inc (NYSE:AMC) has agreed to pay a little more to buy Carmike Cinemas, Inc. (NASDAQ:CKEC). Instead of the original $30 per share deal, AMC has offered offered Carmike shareholders 10.2% more instead, giving the equity owners the option of receiving $33.06 per share in cash or 1.0819 shares of AMC Class A common stock for each share of Carmike they own. The deal has a total value of around $1.2 billion and is subject to the condition that 30% of outstanding Carmike shares can be exchanged for Class A common stock and 70% be exchanged for cash. In light of the new offer, Carmike’s board of directors have unanimously approved the deal and recommend all Carmike stockholders vote ‘For’ the amended agreement. Jim Simons’ Renaissance Technologies owned more than 350,000 shares of AMC Entertainment Holdings Inc (NYSE:AMC). A total of 26 funds  from our database owned shares of Carmike Cinemas, Inc. (NASDAQ:CKEC) at the end of March.

Disclosure: none