Why Are These Five Stocks Trending Today?

Markets are getting hammered as the shocked investors react to the UK’s decision to bid farewell to the European Union. International markets have started to feel the heat and immediate ramifications of the referendum’s results after which the UK is set to embark on a road teeming with uncertainties.

Investors are also closely watching some of the stocks today, including Mondelez International Inc (NASDAQ:MDLZ), Coca-Cola European Partners PLC (NYSE:CCE), Biostar Pharmaceuticals Inc (NASDAQ:BSPM), Skullcandy Inc (NASDAQ:SKUL) and United Continental Holdings Inc (NYSE:UAL). Let’s take a look at why these stocks are in the spotlight today and analyze how hedge funds in our database are positioned towards them.

Hedge fund sentiment is an important metric for assessing long-term profitability. At Insider Monkey, we track over 760 hedge funds, whose quarterly 13F filings we analyze to determine their collective sentiment towards several thousand stocks. However, 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 (read more details here).

Mondelez International, Coca-Cola European Down

Shares of Mondelez International Inc (NASDAQ:MDLZ) and Coca-Cola European Partners PLC (NYSE:CCE) are trading in the red today amid a report from Susquehanna International Group that discussed several companies that are vulnerable to volatility in the pound and euro, including the two. The firm, however, prefers Mondelez International over Coca-Cola European Partners because all of Coca-Cola European Partners revenues are exposed to the euro and pound, and it is facing structural risks. Nevertheless, the main reason for the decline of both stocks is the overall market weakness registered today. Out of nearly 766 funds tracked by Insider Monkey, 63 funds were bullish on Mondelez International Inc (NASDAQ:MDLZ) at the end of the first quarter. Nelson Peltz’s Trian Partners owns around 48.02 million shares of the company.

Biostar Pharmaceuticals Skyrocketing on Friday

Biostar Pharmaceuticals Inc (NASDAQ:BSPM)’s stock has skyrocketed more than 63% so far today, which is impressive taking into account the overall slump of the market. However, there seems to be no particular news driving the growth. The stock of the Chinese developer of drugs has been doing well this year, gaining over 300% over the last month alone. Earlier this month, the company held its annual shareholders meeting at its executive offices in Xianyang City, China. The shareholders elected new directors and ratified the appointment of new financial auditors in the company. Jim Simons’ Renaissance Technologies owns 104,856 shares of Biostar Pharmaceuticals Inc (NASDAQ:BSPM) as of the end of March.

On the next page, we discuss why shares of Skullcandy and United Continental Holdings are making moves today

Incipio Acquires Skullcandy

Skullcandy Inc (NASDAQ:SKUL)’s stock has surged over 21% so far today after the company said on Friday that it had agreed to be acquired by Incipio LLC, a global consumer technology solutions platform. Incipio will pay $5.75 per share in cash, or a total of about $177 million for the Utah-based company that markets headphones, earphones, and other accessories. Skullcandy’s CEO Hoby Darling said in a statement that the merger is in the best interest of the company and its shareholders and added that both companies will join hands to amplify their efforts towards more innovation and growth. John W. Rogers’ Ariel Investments is one of the 12 funds from our database that had stakes in Skullcandy Inc (NASDAQ:SKUL) at the end of the first quarter. It has about 2.18 million shares of the company.

United Continental Strikes Agreement with Flight Attendants

United Continental Holdings Inc (NYSE:UAL) is in the spotlight today after the company reached a tentative agreement with the Association of Flight Attendants to bring about 25,000 flight attendants under a single labor contract. The deal is deemed as a breakthrough after years of employee protests and negotiations. Among the funds we track, 61 funds owned shares of United Continental Holdings Inc (NYSE:UAL) at the end of March, down from 73 a quarter earlier. Paul Reeder and Edward Shapiro’s PAR Capital Management owns around 14.38 million shares of the company.

Disclosure: None