The US stock market is trading lower today following weak earnings reported by phone and utility companies, as well as some retailers.
Among the stocks that are dragging the market down are Barnes & Noble, Inc. (NYSE:BKS), Target Corporation (NYSE:TGT), Cree, Inc. (NASDAQ:CREE), 21Vianet Group Inc (NASDAQ:VNET), and Lowe’s Companies, Inc. (NYSE:LOW). Let’s have a closer look at the developments that caused these stocks to plunge and take a look at some investors that are bullish on them.
At Insider Monkey, we track around 770 hedge funds and institutional investors. Through extensive backrests, 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 more details about our small-cap strategy).
Barnes & Noble, Inc. (NYSE:BKS) is trading down after the company ousted its CEO Ronald Boire, who was hired less than a year ago, saying that he “was not a good fit”. Leonard Riggio, the company’s executive chairman and one of its founders, has postponed his retirement and will fill in as the CEO, while Barnes & Noble finds a replacement. Earlier today Gabelli & Co. downgraded the stock to ‘Hold’ from ‘Buy’. Barnes & Noble, Inc. (NYSE:BKS) continues to have a tough time in terms of traffic due to fierce competition from Amazon.com, Inc. (NASDAQ:AMZN), which continues to dominate. At the end of June, David Abrams’ Abrams Capital Management held 10.42 million shares of Barnes & Noble.
On the other hand, shares of Target Corporation (NYSE:TGT) are trading in the red following the release of the company’s results for the second quarter, which included revenue of $16.2 billion, which was lower than estimates of $17.13 billion, while EPS of $1.23 was higher than the expected $1.12. Same store sales declined by 1.1% during the quarter, versus expectations of 0.9%. The company also provided net-income guidance in the range of $0.75 to $0.95 per share for the third quarter, while for the full year, net income per share is expected between $4.36 and $4.76. Among the investors in our database, Columbus Circle Investors holds around 1.34 million shares of Target Corporation, according to its 13F filing for the end of June.
On the next page, we are going to discuss the results reported by Cree, Inc. (NASDAQ:CREE), 21Vianet Group Inc (NASDAQ:VNET), and Lowe’s Companies, Inc. (NYSE:LOW).