Although there is still a fair amount of uncertainty over President-elect Donald Trump’s policies, Wall Street doesn’t seem concerned, at least at the moment. Perhaps due to the thought of upcoming tax cuts and the repatriation of foreign profits, all three index futures are higher this morning.
Among the stocks that are trending on Thursday are Novavax, Inc. (NASDAQ:NVAX), Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA), U.S. Silica Holdings Inc (NYSE:SLCA), Twitter Inc (NYSE:TWTR), and Metlife Inc (NYSE:MET). Let’s find out why the spotlight is shining on each of the five and see what successful hedge funds think of them.
At Insider Monkey, we track around 750 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details).
Novavax, Inc. (NASDAQ:NVAX) shares are down by almost 16% this morning after the company announced that it will immediately cut 30% of its workforce and incur a one-time restructuring expense of $3 million-to-$4 million. Due to the charge, Novavax’s management anticipates a reduction in cash burn of between $70 million and $100 million in 2017, relative to 2016. Given the market’s reaction, it seems that traders were anticipating a more sizable labor force cut. In addition, Novavax reported a third quarter loss of $0.24 per share, topping Wall Street’s estimate of a loss of $0.26 per share. Julian Baker and Felix Baker’s Baker Bros. Advisors was long roughly 2.38 million shares of Novavax, Inc. (NASDAQ:NVAX) at the end of the second quarter.
Traders are watching Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) after Rupesh Parikh of Oppenheimer reiterated his ‘Outperform’ rating and $300 price target on the stock. Seeing as shares of the stock are down by around 11% since the day after the company’s latest analyst day, Parikh thinks that shares are close to bottom given Ulta’s competitive fundamentals and the impending holiday season. Of course, whether the market agrees and will prove Parikh right is unknown. 36 funds in our database owned $2.05 billion in Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) positions at the end of June, which accounted for 13.50% of the float.
On the next page we’ll examine the latest happenings concerning US Silica Holdings, Twitter, and Metlife.
U.S. Silica Holdings Inc (NYSE:SLCA) shares are 3.76% in the red after the fracking sand producer priced a 9-million-share secondary offering at $46.25 apiece. Moreover, the company has granted underwriters of the offering a 30-day option to buy an additional 1.35 million shares. U.S. Silica intends to use the net proceeds for general corporate purposes including for potential acquisitions of complementary businesses or assets. The number of funds in our system with holdings in U.S. Silica Holdings Inc (NYSE:SLCA) fell by four quarter-over-quarter to 31 at the end of June.
Twitter Inc (NYSE:TWTR) is slightly in the red after the company announced that its COO, Adam Bain, is stepping down. The current CFO, Anthony Noto, will replace Bain as COO. As the Chief Operating Officer, Noto will assume responsibility for Twitter’s revenue-generating organizations, including global advertising sales, global partnerships, and business development, effective immediately. 30 funds were long Twitter Inc (NYSE:TWTR) at the end of the second quarter, up by three funds from a quarter earlier.
Metlife Inc (NYSE:MET) shares have popped by 7% after the company announced that its Board of Directors has approved a new $3 billion stock buyback authorization. CEO Steven Kandarian said, “Excess capital belongs to our shareholders, and we are pleased to announce our largest ever buyback authorization now that we have defined a capitalization and execution plan for the separation of Brighthouse Financial. Together with our dividend, which has grown by 116 percent over the past three years, this buyback authorization shows that our strategy of generating higher free cash flow is gaining momentum.” 45 funds tracked by Insider Monkey owned $1.41 billion worth of Metlife Inc (NYSE:MET) shares at the end of June, amounting to 3.20% of the float.