It’s a quite day on the Street with Dow Jones and S&P 500 slightly in the green as investors await the upcoming Brexit vote on Thursday.
Among the stocks on investors’ radars today are United Continental Holdings Inc (NYSE:UAL), Reynolds American, Inc. (NYSE:RAI), Viacom, Inc. (NASDAQ:VIAB), Emergent Biosolutions Inc (NYSE:EBS) and Cirrus Logic, Inc. (NASDAQ:CRUS). Let’s see why these stocks are trending today and what hedge funds think of these companies.
While there are many metrics that investors can assess in the investment process, hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).
United Continental Reveals Plan to Boost Profitability
United Continental Holdings Inc (NYSE:UAL)’s stock has gained almost 4% after the company outlined its plans to boost profitability through cost and efficiency measures. The Chicago-based airline company plans to increase its revenue and slash expenses by a combined $3.1 billion by 2018. United Continental also said its fare metric will be at the higher end of prior guidance in the second quarter. Among the funds we track, 61 funds owned shares of United Continental Holdings Inc (NYSE:UAL) at the end of March, down from 73 a quarter earlier. Paul Reeder and Edward Shapiro’s PAR Capital Management owns around 14.38 million shares of the company.
Supreme Court Trashes EU Lawsuit Against Reynolds American
Reynolds American, Inc. (NYSE:RAI)’s stock has inched up after the US Supreme Court rejected a European Union lawsuit that accused the North Carolina-based cigarette maker of running a money-laundering network related to drug smuggling into Europe. The ruling says that the Racketeer Influenced and Corrupt Organizations Acts do not apply to claims related to overseas actions. The EU has been after Reynolds American and its American subsidiaries for around a decade, alleging that the company is in cahoots with organized crime groups, which launder money and smuggle drugs into Europe. With ownership of 15.19 million shares, Neil Woodford’s Woodford Investment Management is one the 39 hedge funds from our database having stakes in Reynolds American, Inc. (NYSE:RAI) at the end of the first quarter.
On the next page, we discuss why Viacom, Emergent Biosolutions and Cirrus Logic are in the headlines today.
Viacom Ex-CEO Lawsuit: Redstone Fires Back
Lawyers of media tycoon Sumner Redstone have filed a motion to dismiss a lawsuit in Massachusetts court, which alleges that Mr. Redstone, 93, was mentally impaired when he decided to oust Viacom, Inc. (NASDAQ:VIAB)’s CEO Philippe Dauman and board member George Abrams from the trust that oversees Viacom and CBS. The motion requests the court to reject the lawsuit and claims that Mr. Redstone’s has not been deemed mentally incompetent by a court or by medical doctors. In a statement, a spokesman for Damon and Abrams, who are the fillers of the lawsuit, said that the motion depicts continued efforts to stop any fair inquiry into Redstone’s “well-being.” From our database, 42 funds were bullish on Viacom, Inc. (NASDAQ:VIAB) at the end of March. Donald Yacktman’s Yacktman Asset Management owns over 4.44 million shares of the company, according to its latest 13F filing.
FDA Approves Emergent Biosolutions Building 55
Emergent Biosolutions Inc (NYSE:EBS) announced on Monday that the FDA approved Building 55, the company’s facility for manufacturing of anthrax vaccine, BioThrax, after Pre-Approval Inspection (PAI) of the building. In a statement, Adam Havey, president of the biodefense division of Emergent Biosolutions said that the company has reached a critical milestone in its BioThrax comparability program. Pre-Approval Inspection (PAI)’s positive outcome shows a “substantial” financial investment in Building 55 by the company, and hard work by its employees, Mr. Havey added. Joel Greenblatt’s Gotham Asset Management has 443,728 shares of Emergent Biosolutions Inc (NYSE:EBS) as of the end of the first quarter. Overall, 17 funds from our database are long the stock as of the end of March.
Cirrus Logic Gets “Buy” Rating from Canaccord Genuity
Cirrus Logic, Inc. (NASDAQ:CRUS)’s stock has advanced by over 4% after Canaccord Genuity initiated coverage with a “Buy” rating and a price target of $52. The firm cited Apple Inc. (NASDAQ:AAPL)’s content growth, Android’s increasing market share, and long term microphone opportunity as the reasons for the bullish rating. Crispin Odey’s Odey Asset Management Group is one of 33 hedge funds from our database, which are long Cirrus Logic, Inc. (NASDAQ:CRUS), as of the end of the first quarter.