While investors await the Federal Reserve’s decision to raise rates, shares of QUALCOMM, Inc. (NASDAQ:QCOM), VeriFone Systems Inc (NYSE:PAY), Apple Inc. (NASDAQ:AAPL), and 3M Co (NYSE:MMM) are trending because of various catalysts. Let’s find out why.
Given that Insider Monkey has done a lot of research into what the smart money likes and doesn’t like, let’s also analyze relevant hedge fund sentiment toward these stocks. In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8000 funds in operation at present, Hedge fund experts at Insider Monkey look at the aristocrats of this group, around 730 funds. Contrary to popular belief Insider Monkey’s research revealed that hedge funds underperformed in recent years because of their short positions as well as the huge fees that they charge. Hedge funds managed to outperform the market on the long side of their portfolio. In fact, the 15 most popular small-cap stocks among hedge funds returned 102% since the end of August 2012 and beat the S&P 500 Index by 53 percentage points (see the details here).
To the disappointment of Barry Rosenstein‘s JANA Partners, QUALCOMM, Inc. (NASDAQ:QCOM) has decided to keep its current structure and not separate its chip design business from its licensing business as the activist wanted.
CEO Steve Mollenkopf said:
The strategic benefits of the current structure will best fuel Qualcomm’s growth as we move through the upcoming technology transitions and extend our technologies into new user experiences, services and industries. The strategic benefits and synergies of our model are not replicable through alternative structures. We therefore believe the current structure is the best way to execute on our strategy to build on our position in the ecosystem and deliver enhanced performance and returns. Looking ahead, we have a focused plan in place that we believe will drive growth and we are off to a good start implementing that plan.
Market participants are undisturbed by QUALCOMM, Inc. (NASDAQ:QCOM)’s decision, however, as shares opened 2% higher on Tuesday. Among the funds we track, 68 held shares of the company at the end of September, including the aforementioned JANA Partners, which disclosed ownership of 28.55 million shares in its last 13F filing.
In separate news, VeriFone Systems Inc (NYSE:PAY) is trending after the company announced excellent fourth fiscal quarter results. For the fourth quarter, VeriFone reported EPS of $0.49 on revenue of $514 million, exceeding analyst estimates by $0.01 per share and $0.67 million, respectively. For its fiscal year, the company earned a Non-GAAP net income per diluted share of $1.83 on revenue of $2.001 billion. In terms of outlook, management expects Verifone to earn between $2.15 and $2.19 per share on revenue in the range of $2.09 billion and $2.11 billion for fiscal year 2016. A total of 27 elite funds owned around 4.6% of VeriFone Systems Inc (NYSE:PAY)’s float at the end of the third quarter, up by three funds from the previous quarter.
On the next page, we examine Apple, and 3M Co.