While the broader indexes are trading close to flat, a number of stocks are showing considerably more volatility than the broader market.
Therefore, in this article we will discuss Pandora Media Inc (NYSE:P), Trinity Biotech plc (ADR) (NASDAQ:TRIB), Seadrill Ltd (NYSE:SDRL), and Aralez Pharmaceuticals Inc (NASDAQ:ARLZ), as well as another stock in the spotlight, salesforce.com, inc. (NYSE:CRM). In addition, we will assess the hedge fund sentiment towards each stock.
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).
Pandora Media Inc (NYSE:P) is 5% in the green after Goldman Sachs analyst Heath Terry hiked his target on the internet radio streamer to $19 from $17 and added the stock to the ‘Conviction Buy’ list (versus the previous ‘Buy’ rating). Terry thinks competition will slow as current competitors focus on making money rather than grabbing market share. There is also a possibility that Pandora’s subscriptions could surprise to the upside. Julian Robertson‘s Tiger Management initiated a new stake of over 1.46 million shares in Pandora Media Inc (NYSE:P) during the second quarter.
Trinity Biotech plc (ADR) (NASDAQ:TRIB) shares have almost halved after the company announced the withdrawal of its 510(k) premarket notification submission for the Meritas Troponin-I Test and Meritas Point-of-Care Analyzer. Apparently, the FDA asked Trinity on September 29 to consider withdrawing their submission due to various concerns, mainly related to the device’s operating temperature range and that the Troponin-I clinical performance is not consistent with the clinical performance data presented by the most recently cleared laboratory Troponin device. On the back of the news, management plans to cut expenditure levels to $1.5 million a year from the current rate of around $9 million a year. The company will also recognize a non-cash write-off in excess of $50 million. Of the around 749 elite funds we track, 13 funds held $50.32 million worth of Trinity Biotech plc (ADR) (NASDAQ:TRIB)’s stock, which accounted for 18.60% of the float on June 30, versus 15 funds and $49.59 million, respectively, at the end of March.
On the next page, we take a closer look at Seadrill Ltd, Aralez Pharmaceuticals, and salesforce.com.