On the day before Thanksgiving, five stocks, First Solar, Inc. (NASDAQ:FSLR), Medtronic PLC (NYSE:MDT), Eli Lilly and Co (NYSE:LLY), Axovant Sciences Ltd (NYSE:AXON), and Biogen Inc (NASDAQ:BIIB) are in the spotlight. Let’s uncover why each stock is trending and analyze the hedge fund sentiment towards them.
While there are many metrics that investors can assess in the investment process, the 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 to beat the S&P 500 by around 95 basis points per month (see the details here).
Traders are watching First Solar, Inc. (NASDAQ:FSLR) after Macquarie analyst Gurpreet Gujral downgraded the stock to ‘Neutral’ from ‘Outperform’ and trimmed his price target to $32.75 from $57.33. The analyst cited the lack of positive catalysts ahead due to First Solar nixing the Series 5 line that had been slated to hit the market next year. Nevertheless, given that President-elect Trump has backed away from his global-warming-isn’t-real view somewhat, some bulls think that there is potential for Gujral to be wrong in the long term. Cliff Asness‘ AQR Capital Management held 1.74 million shares of First Solar, Inc. (NASDAQ:FSLR) at the end of the third quarter.
Medtronic PLC (NYSE:MDT) is in the spotlight after Oppenheimer analyst Steven Lichtman of trimmed his price target on the stock to $84 from $94. Atlhough he maintains his ‘Outperform’ recommendation, Lichtman is slightly less optimistic about the stock, due to the company’s second-quarter results, which were primarily the result of some domestic issues. Medtronic reported mixed results for the quarter, beating Wall Street’s profit estimates by a penny a share, but missing the top-line consensus by $160 million. A total of 43 funds tracked by Insider Monkey were long Medtronic PLC (NYSE:MDT) at the end of September, down by seven from the end of June.
On the next page, we examine Eli Lilly and Co, Axovant Sciences, and Biogen.
Eli Lilly and Co (NYSE:LLY)’s stock has retreated by 14% in the pre-market after the company said a Phase 3 study evaluating the company’s investigational drug solanezumab for the potential treatment of mild dementia caused by Alzheimer’s failed to meet the primary endpoint of showing a statistically significant slowing in cognitive decline compared to patients treated with placebo as measured by the ADAS-Cog14 (Alzheimer’s Disease Assessment Scale-Cognitive subscale). Due to the failure, Eli Lilly will not file regulatory submissions for solanezumab for the treatment of mild dementia due to Alzheimer’s disease. The company will take a fourth-quarter charge of around $0.09 per share after tax due to the study outcome. Nevertheless, the management still expects the company’s revenue to grow by at least 5% per year betewen 2015 to 2020. Of the 742 funds in our database, 55 were long Eli Lilly and Co (NYSE:LLY) at the end of September, up from 49 at the end of June.
Due to the Eli Lilly news, Biogen Inc (NASDAQ:BIIB) and Axovant Sciences Ltd (NYSE:AXON) are down 10% and 17%, respectively, in pre-market trading. Like Eli Lilly, Axovant Sciences Ltd (NYSE:AXON) is developingg a potential drug for dementia due to Alzheimer’s disease, a 5-HT6 antagonist, intepiridine. Meanwhile, a big part of Biogen’s pipeline’s success depends on aducanumab, another investigational treatment for early Alzheimer’s disease which was granted the Fast Track designation by the U.S. Food and Drug Administration a few months ago. Following Eli Lilly’s update, some traders are more cautious on intepiridine and aducanumab’s prospects. In terms of smart money sentiment, 81 funds tracked by us held shares of Biogen Inc (NASDAQ:BIIB) and 20 investors were long Axovant at the end of the third quarter.