On the day before Christmas, Netflix, Inc. (NASDAQ:NFLX), Cognizant Technology Solutions Corp (NASDAQ:CTSH), Keurig Green Mountain Inc (NASDAQ:GMCR), KaloBios Pharmaceuticals Inc (NASDAQ:KBIO), and Hyatt Hotels Corporation (NYSE:H) are each trending for different reasons. 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 the stocks. We pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular small-cap stock picks in real time since the end of August 2012. These stocks have returned 102% since then and outperformed the S&P 500 Index by around 53 percentage points (see the details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.
Shares of streaming giant Netflix, Inc. (NASDAQ:NFLX) are trending after the company disclosed CEO Reed Hastings 2016’s compensation. For the next year, Hastings will receive a compensation package of $900,000 in base salary and $19.05 million in stock options, giving the star executive a higher total compensation package than his 2015 compensation of $1 million in base salary and $13.7 million in stock options. Given that Netflix, Inc. (NASDAQ:NFLX) shares have rallied 142% year-to-date, many investors feel Hastings’ compensation is well deserved. A total of 57 elite funds, including Andreas Halvorsen’s Viking Global, were long Netflix at the end of the third quarter.
In separate news, Cognizant Technology Solutions Corp (NASDAQ:CTSH) is modestly higher in morning trading after the company’s board of directors extended Cognizant’s stock repurchase program deadline to December 31, 2017 from December 31, 2015. Through the third quarter, Cognizant Technology Solutions Corp (NASDAQ:CTSH) has repurchased 5.3 million of shares year-to-date, reducing its float by 0.87%. Shares of the business software company are up 14% in 2015 so far. Cliff Asness’ AQR Capital Management owned 1.36 million shares at the end of September.
On the next page, we examine Keurig Green Mountain Inc, KaloBios Pharmaceuticals Inc, and Hyatt Hotels Corporation.
Another trending stock on Christmas eve is Keurig Green Mountain Inc (NASDAQ:GMCR), whose shares are 0.25% higher after the company’s board of directors recommended its shareholders approve the $92 per share acquisition offer made by JAB Holding earlier in the month. If approved, the deal should close in the first quarter 2016, and put an end of Keurig Green Mountain Inc (NASDAQ:GMCR)’s controversial life as a public company. Many bears had expected increasing competition and less patent protection to reduce Keurig Green Mountain Inc (NASDAQ:GMCR)’s margins and EPS and send its stock price lower. JAB Holding’s offer saved the day, making the probability that the acquisition deal goes through very likely.
KaloBios Pharmaceuticals Inc (NASDAQ:KBIO) shareholders can’t seem to catch a break. Days after CEO Martin Shkreli was arrested for securities fraud charges, the NASDAQ notified KaloBios that its stock will be delisted, citing the criminal indictment of Shkreli as one of its main reasons. If KaloBios doesn’t appeal, its ticker will be removed from the NASDAQ on December 30 and will presumably trade OTC once its stock is unfrozen. KaloBios Pharmaceuticals Inc (NASDAQ:KBIO)’s auditor and interim CFO both resigned earlier in the week.
Hyatt Hotels Corporation (NYSE:H) is the latest corporate victim of hackers as the company disclosed the following statement:
“[Hyatt] recently identified malware on computers that operate the payment processing systems for Hyatt-managed locations. As soon as Hyatt discovered the activity, the company launched an investigation and engaged leading third-party cyber security experts… Hyatt has taken steps to strengthen the security of its systems, and customers can feel confident using payment cards at Hyatt hotels worldwide.”
Hyatt Hotels Corporation (NYSE:H) shares are only down modestly on the news, however, with shares off 1.4% in morning trading.