Opinion polls shifting against Brexit in the UK resulted in rising U.S. stock index futures on Monday.
Some of the stocks that traders should keep an eye on today include JD.Com Inc (ADR) (NASDAQ:JD), Wal-Mart Stores, Inc. (NYSE:WMT), Cincinnati Bell Inc. (NYSE:CBB), GoPro Inc (NASDAQ:GPRO) and Bank of America Corp (NYSE:BAC). This article will look into the events that put these stocks in the spotlight, and analyzes the hedge funds sentiment towards these companies.
Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that imitating the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012 (read more details here).
JD.Com to Acquire Yihaodian
Shares of JD.Com Inc (ADR) (NASDAQ:JD) and Wal-Mart Stores, Inc. (NYSE:WMT) are in the green in pre-market trading today after some Chinese media outlets reported that JD.com plans to acquire Yihaodian, a Chinese e-commerce platform owned by Wal-Mart Stores, Inc. (NYSE:WMT). The sources said that the China-based eCommerce company is acquiring Yihaodian to form an alliance with Walmart to compete with Alibaba. With ownership of 55.23 million shares, billionaire Warren Buffett’s Berkshire Hathaway is one of the 54 hedge funds from our database that reported stakes in Wal-Mart Stores, Inc. (NYSE:WMT) as of the end of March. JD.Com Inc (ADR) (NASDAQ:JD) is also popular among the funds tracked by us, with 73 investors bullish on the company at the end of the first quarter. Lei Zhang ‘s Hillhouse Capital Management owns around 123.20 million shares of the company, according to its latest 13F filing.
Cincinnati Bell is an Attractive Buyout Target
Cincinnati Bell Inc. (NYSE:CBB) is in the spotlight after the investment firm Gabelli & Co, which is owned by GAMCO Investors, a fund that has approximately 13.47 million shares of the company, said in an article on Barron’s that the telephone company is a buyout target and recommended buying shares. Gabelli’s analyst Sergey Dluzhevsky thinks that additional fiber investment by Cincinnati Bell will increase the growth in wireline business, and could make the company an “attractive” acquisition candidate for telecom or cable company. Apart from GAMCO Investors, Jim Simons’ Renaissance Technologies is a notable hedge fund having stakes in Cincinnati Bell Inc. (NYSE:CBB), as of the end of the first quarter.
Move on to the next page to see why GoPro and Bank of America are in the spotlight today.
GoPro’s Financial Results are Promising: J.P Morgan
Shares of GoPro Inc (NASDAQ:GPRO) continue to grow following Friday’s bullish note to investors by J.P. Morgan about the company. The financial services firm thinks that GoPro’s second-quarter results and, a “promising” and higher-than-expected rate of decline in the company’s channel inventory depicts a strong demand. The analyst added that the strong results are due to effective marketing than last year, and a “less cluttered” product lineup. Among the funds in our database, 16 investors were long GoPro Inc (NASDAQ:GPRO) at the end of the first quarter, having amassed $96.2 million worth of stock.
Bank of America Corp’s Stock Could Rise More than 20%
Bank of America Corp (NYSE:BAC)’s stock jumped 2.46% in premarket trading today after an article on Barron’s said the stock could rise by more than 20% after short-term problems like sell-offs, fears of Brexit, delayed rate hike and declining bond yield curve ebb away. The author added that BofA’s current price could prove to be an attractive entry point. Bank of America has a strong $1.2-trillion deposit base and unusually low valuation which give it a competitive advantage over its peers, the article argued. As of the end of the first quarter, 110 funds owns shares of Bank of America Corp (NYSE:BAC). Natixis Global Asset Management’s Harris Associates owns around 144.29 million shares of the company.