Cognizant Technology Solutions Corp (NASDAQ:CTSH) ended the week more than 12.4% in the red after the company disclosed that it is conducting an internal investigation as to whether certain payments relating to facilities in India were made in possible violation of the U.S. Foreign Corrupt Practices Act. The company has voluntarily notified the DoJ and SEC. In response to the news, Ashwin Shirvaikar, analyst at Citi, trimmed his price target to $55 from $68 per share and downgraded the stock to ‘Neutral’ from ‘Buy’. Although the company is making the right capital allocations for long term success and the stock is trading at an attractive valuation, Shirvaikar says that the resulting regulatory uncertainty could make the stock ‘uninvestable’ for a certain subset of investors, which will lower demand for the stock overall. The number of funds tracked by us with holdings in Cognizant Technology Solutions Corp (NASDAQ:CTSH) rose by two quarter-over-quarter to 40 at the end of June.
With rumors on the Street flying about the potential sale of Scottrade, and also rumors propagating that it might link up with peer E*TRADE Financial Corp (NASDAQ:ETFC), TD Ameritrade Holding Corp. (NASDAQ:AMTD) shares had a solid week, advancing by 6.4%. On the bull side, analyst Douglas Mewhirter of SunTrust was rather optimistic, saying that a potential purchase of Scottrade by TD Amerittrade could be as much as 10% accretive to the company’s EPS for fiscal 2017. On the bear side, William Katz of Citi thinks the rally has now left TD Ameritrade shares at prices that don’t accurately reflect the downside and leave ‘no room for a bad outcome’ such as if an accretive merger doesn’t materialize. Katz has a $31.5 price target and a ‘Neutral’ rating on the stock. Among the funds we track, 13 funds owned $183.31 million worth of TD Ameritrade Holding Corp. (NASDAQ:AMTD)’s stock, which accounted for 1.20% of the float on June 30, versus 13 funds and $159.17 million, respectively, on March 31.
Although First Solar, Inc. (NASDAQ:FSLR)’s stock gained 6.55% this week, many investors are scratching their heads as to whether the news of a potential reduction in Chinese solar tariffs is good or bad news for the American solar producer. On one hand, lower solar tariffs would weaken First Solar’s Chinese competitors, which long have been accused of being unfairly subsidized by the Chinese government. On the other hand, the lower tariffs mean the overall global solar pie is smaller, which is a bad thing. Philip Shen of Roth Capital is one of the analysts who think the latter, as he considers that the news is negative for the entire industry. However, based on First Solar’s price action on Friday, not many investors share his view. A total of 30 funds tracked by us owned shares of First Solar, Inc. (NASDAQ:FSLR) at the end of the second quarter, down by one from the previous quarter.