Here’s Why These Stocks Are Trending Today

The US stock market opened higher today as investors digested a series of economic data, which is being closely watched ahead of the Federal Reserve’s FOMC meeting next week. On the labor market front, a report showed that weekly initial jobless claims were 260,000, slightly below the consensus forecast of 265,000. Apart from the labor market data, the Fed also closely watches the inflation data and the August Production Price Index inched up by 0.1%, in line with expectations. Meanwhile, retail sales came in below expectations. The data has painted a mixed picture of the economy and it will be interesting to see if the Fed makes a move based on this when it meets next week.

Several stocks are in the spotlight today, including Royal Dutch Shell Plc (ADR) (NYSE:RDS.A), Dick’s Sporting Goods Inc. (NYSE:DKS), Rigel Pharmaceuticals Inc. (NASDAQ:RIGL), Honda Motor Co Ltd (ADR) (NYSE:HMC), and Tata Motors Limited (ADR) (NYSE:TTM). In this article, we will take a closer look at these stocks, as well as, will discuss the hedge fund sentiment towards each of them.

At Insider Monkey, we track around 740 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 more details about our small-cap strategy).

Royal Dutch Shell Plc (ADR) (NYSE:RDS.A) today announced that it has reached an agreement to sell its Denmark refining business. The company has entered into an agreement with Dansk Olieselskab ApS for the sale of A/S Dansk Shell in Denmark. The unit includes the 70,000 barrels per day Fredericia refinery and local trading and supply activities. The consideration for the sale is $80 million, which includes working capital. The sale also includes long-term supply agreements for crude oil and feedstocks to the refinery. The sale is part of Royal Dutch’s strategy to streamline its downstream operations. Of the 749 funds in our database, 37 held $1.71 billion worth of Royal Dutch Shell stock, compared to 34 funds with $915.80 million worth of shares a quarter earlier.

Dick’s Sporting Goods Inc. (NYSE:DKS) shares got a boost this morning following rating upgrades by Oppenheimer and Citigroup. Oppenheimer upgraded the stock to ‘Outperform’ from ‘Market Perform’, while Citi upgraded it to ‘Outperform’ with a $75 price target. Hedge fund interest in Dick’s Sporting Goods rose in the June quarter, with 44 of the 749 funds we track holding $772.30 million worth of the company’s shares, compared to 35 funds holding $508.62 million worth of stock a quarter earlier.

Rigel Pharmaceuticals Inc. (NASDAQ:RIGL) announced that it intends to establish a commercial organization as it prepares for the launch of fostamatinib, the company’s oral SYK inhibitor. The drug is being developed for the treatment of chronic immune thrombocytopenia (ITP). The drug met its primary endpoint in one of the two Phase 3 studies Rigel Pharmaceuticals is conducting. As part of the restructuring, Rigel announced a 38% reduction in its workforce. Most of the job cuts will impact the company’s research unit and are expected to result in $17 million to $20 million in annual savings for the company. Among the funds we track, 19 held $50.30 million worth of Rigel Pharmaceuticals shares, amassing 24.50% of the total outstanding shares at the end of the second quarter. This compares to 18 funds that amassed $45.46 million worth of Rigel Pharmaceuticals shares at the end of March.

Japanese automaker Honda Motor Co Ltd (ADR) (NYSE:HMC) is likely to be in focus today after announcing a 26.3% increase in car registrations in Europe during August. According to the European Automobile Manufacturers Association, Honda’s car registrations rose to 8,306 units last month. Eight funds from our database were long Honda Motor Co at the end of June, down from 10 funds a quarter earlier, while the total value of their holdings slid to $89.07 million from $107.26 million during the second quarter.

Similarly, Tata Motors Limited (ADR) (NYSE:TTM) saw a 22.4% increase in car registrations for its Jaguar Land Rover unit in August. The European Automobile Manufacturers Association reported that registrations for Jaguar Land Rover came in at 8,824 units. Tata Motors has also been experiencing strong sales growth in its home market. According to the the Society of Indian Automobile Manufacturers, automobiles sales in the country rose by 17% to 258,722 units in August. Tata Motors saw 12 investors from our database long its stock at the end of second quarter, compared to 15 funds that held approximately $466.28 million worth of shares a quarter earlier.

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