The US stock market is trading higher on Monday, as investors try to assess the probability of an interest rate hike in September, following Fed Chair Janet Yellen’s speech at the Jackson Hole summit on Friday.
Meanwhile, five stocks, Amazon.com, Inc. (NASDAQ:AMZN), Herbalife Ltd. (NYSE:HLF), Barrick Gold Corporation (USA) (NYSE:ABX), Mylan NV (NASDAQ:MYL), and Seadrill Ltd (NYSE:SDRL), are making headlines on the back of different developments that we are going to discuss in this article. Moreover, we will take a look at how the smart money investors from our database are positioned towards the companies in question.
At Insider Monkey, we track around 750 hedge funds and other 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).
New FAA Rules Open Skies For Business
Traders are talking about Amazon.com, Inc. (NASDAQ:AMZN) today after the U.S. Federal Aviation Authority clarified acceptable commercial usage practices for drones. According to the rules, commercial drones must fly at or below 400 feet at speeds of 100 miles per hour or less. They must also weigh less than 55 pounds and only operate during the daytime +/- 30 minutes. Analysts expect the new regulations to generate $82 billion in economic activity in the U.S. over the next decade. Many investors also expect the development to help Amazon deliver its products faster in a move that should help the eCommerce giant to take more market share from Wal-Mart Stores, Inc. (NYSE:WMT). Among the investors we track, Andreas Halvorsen’s Viking Global owned 3.28 million shares of Amazon.com, Inc. (NASDAQ:AMZN) at the end of June, down by 5% quarter-over-quarter.
Hedge Fund Drama Around Herbalife Continues
Herbalife Ltd. (NYSE:HLF) is in the spotlight after billionaire Carl Icahn’s Icahn Capital LP added 2.3 million shares to its position, giving Icahn ownership of 20.8% of Herbalife versus 18.3% before. Icahn’s move follows Bill Ackman’s recent assertion that Icahn had offered to indirectly sell some of his stake in Herbalife to him through the investment bank Jefferies. Icahn refuted Ackman’s comments, saying that investment banks ‘frequently make bids for our large positions’ and that he has ‘never given Jefferies an order to sell any of our Herbalife shares’.
“At the time of the disclosure, Ackman declared that I have no interest in increasing my position in Herbalife. This was obviously another misstatement of the facts by Ackman since today I bought another 2.3 million shares,” Icahn said in a statement.
On the next page, we find out why Barrick Gold Corporation, Mylan, and Seadrill are trending.