It’s likely going to be a volatile few days for crude with the upcoming OPEC meeting on June 2. Crude futures are a bit lower for the day, down 1.22% and all three indexes are slightly in the red too. Some traders don’t think that OPEC can come to any sort of ‘freeze’ agreement while the bulls hold out hope. Among the stocks trending today are Alibaba Group Holding Ltd (NYSE:BABA), Workday Inc (NYSE:WDAY), Staples, Inc. (NASDAQ:SPLS), Microsoft Corporation (NASDAQ:MSFT), and Pfizer Inc. (NYSE:PFE). Let’s find out why each stock is in the spotlight and see how the smart money is positioned towards them.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).
Major Shareholder To Sell Part of Stake in Alibaba
Alibaba Group Holding Ltd (NYSE:BABA) is 2.85% in the red after major shareholder SoftBank said it will sell minimum $7.9 billion of its stake in the company. SoftBank was an early shareholder of Alibaba and has made a home run return. Now it’s selling part of its stake to raise liquidity and the move should cut its stake in the Chinese e-commerce giant to around 28% of total shares when the transaction is complete. Softbank plans to raise the money by selling $2 billion back to Alibaba, $500 million to a sovereign wealth fund, $400 million to the Alibaba Partnership and $5 billion to institutional buyers via a trust. Alibaba Group Holding Ltd (NYSE:BABA) was included in the equity portfolios of 67 funds from our database at the end of March, down by 10 from the previous quarter.
Workday Slumps on Earnings
Workday Inc (NYSE:WDAY) reported fiscal first quarter EPS of $0.05 on sales of $345.4 million, beating the estimates by $0.07 per share and $6.72 million, respectively. Revenue rose by 37.6% year-over-year as the company’s cloud app subscription sales jumped 39% year-over-year. Guidance is strong, with management expecting fiscal second quarter sales of $371 million to $373 million, higher than the $370.9 million expected by analysts. Among the 766 funds in Insider Monkey’s database, 25 owned 7.6% of Workday shares at the end of the first quarter.
On the next page, we examine Staples, Microsoft Corporation, and Pfizer.