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Trending Stocks: Microsoft, Nokia, Baidu and Others

Markets are recuperating after long periods of decline. On Tuesday, markets opened higher following a statement from Japan’s Finance Minister Taro Aso, who said that the government is ready to intervene to contain the rising Yen and to prevent the Japanese economy from getting hurt. Some major stocks are trending this morning are Microsoft Corporation (NASDAQ:MSFT), Nokia Corp (ADR) (NYSE:NOK), Baidu Inc (ADR) (NASDAQ:BIDU), Allergan plc Ordinary Shares (NYSE:AGN) and Dean Foods Co (NYSE:DF). This article takes a closer look at why these stocks are making headlines today and see what famous investors think about them.

Our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).

Microsoft Ends MSN Web Service in China

Microsoft Corporation (NASDAQ:MSFT) has announced that it will shut down MSN China web portal as it shifts its focus from online content to software and services for Windows 10 for PC and mobile. Similar to other foreign companies, Microsoft has faced pressure from the Chinese regulators while doing business in the country. In 2014, China launched an antitrust investigation against Microsoft under its 2008 anti-monopoly law. In January, Microsoft was asked to give an explanation regarding the digital data it provided in the country. In a statement, the Redmond-based software company said that it remains “deeply committed” in offering a wide range of services in China including Windows 10, cloud services, and its research and development center. MSN China website will be shut down on June 7. Microsoft Corporation (NASDAQ:MSFT)’s stock is up by 0.78%.

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As of March this year, First Eagle Investment Management owned more than 23.6 million shares of Microsoft Corporation (NASDAQ:MSFT). Overall, 140 hedge funds from our system had long positions in the company at the end of last year.

Nokia Corp Reports Losses

Declining mobile network sales and costs of acquisition of Alcatel-Lucent hurt the first-quarter earnings of Nokia Corp (ADR) (NYSE:NOK) as the company reported a net loss of $583.46 million, down from a profit of $201.35 million posted a year earlier. EPS of $0.03 was in-line with the analysts’ estimates. Revenue in the quarter came in at $6.3 billion, slightly missing the estimates of $6.4 billion. Nokia’s network business suffered an 8% decline in net sales as compared to the first quarter last year. The company faces a tough competition from rivals such as Huawei Technologies Co. In a statement, Rajeev Suri, CEO of Nokia, said that the bad results were mainly due to the challenging environment in the mobile network domain. Mr. Suri said that the company managed to deliver solid profitability during a time when the risk of integration-related disruption was high. Nokia Corp (ADR) (NYSE:NOK) has plunged more than 7% this morning.

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Out of the total funds tracked by Insider Monkey, 26 investors had positions in Nokia Corp (ADR) (NYSE:NOK) at the end of 2015. Michael Platt and William Reeves’ BlueCrest Capital Mgmt have 95,000 shares of the company as of March 2016.

We will discuss Baidu, Allergan and Dean Foods on the next page. 

Baidu’s CEO Says Company Could Go Bankrupt in 30 Days

Shares of Baidu Inc (ADR) (NASDAQ:BIDU) moved 0.74% in the red today as the company continues to grapple with the challenges arising after the death of Zexi Wei, a Chinese college student who died of cancer. Wei had accused the search engine company of manipulating the search results which led to his unsuccessful immunotherapy treatment at a hospital, which was shown at the top of the search results on Baidu, claiming that it has the equipment to treat synovial sarcoma, the rare form of cancer which Wei had. Following the claims by Wei, three regulatory authorities in China opened an investigation against Baidu. On Tuesday, Robin Li, Baidu’s CEO, wrote a letter to the company employees and announced a $153 million fund to compensate victims of fraudulent marketing information. Li also said that the company would go bankrupt within 30 days without the support of its online users and customers. The letter is written a day after the Chinese regulators ordered Baidu to change the way it shows its online search ads. Shares of Baidu have lost more than 13% since the scandal surfaced.

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As of March, William Von Mueffling’s Cantillon Capital Management owns more than 2 million shares of Baidu Inc (ADR) (NASDAQ:BIDU).

Allergan Beats Earnings Estimates

Allergan plc Ordinary Shares (NYSE:AGN)’s stock gained more than 4% this morning after the company posted first quarter EPS of $3.04, better than the expected $3.03. Revenue in the quarter came in at $3.8 billion, below the estimates of $3.96 billion. During the earnings call, Brent Saunders, Allergan’s CEO, said that the company’s business continues to grow in all seven therapeutic areas. Mr. Saunders added that moving forward, the company sees global brands and broad geographic expansion in its innovative business. Allergan plc Ordinary Shares (NYSE:AGN) also announced that its board has approved a $10 billion share buyback program.

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Out of the funds we track, 159 funds held positions with a total value of $22.2 billion in Allergan at the end of the fourth quarter of 2015, which made it the most popular stock among the funds in our database.

Dean Foods Swings to Profit, Buys Friendly’s Ice-cream Business

Dean Foods Co (NYSE:DF)’s stock opened higher but has inched down by around 1% so far today after the company posted first-quarter EPS of $0.45, better than the estimated $0.38, but revenue of $1.88 billion was lower than the expected $1.89 billion. The Dallas-based food company swung to profit mainly due to the declining mil prices. The company has been aiming to shift its focus to milk and ice cream products. On Monday, Dean Foods announced that it will acquire the ice cream manufacturing and retail business of Friendly’s restaurant chain for $155 million. The deal is expected to close by the second quarter this year.

   

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David Harding’s Winton Capital Management 416,950 shares of Dean Foods Co (NYSE:DF) at the end of 2015. As of the end of 2015, 18 hedge funds had approximately $191.1 million worth of positions in Dean Foods.

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