Why Best Buy, Amazon, Monsanto, and 2 Other Stocks Have Investors Buzzing

It’s a good day to be a bull on Wall Street as all three indexes are well in the green and the S&P 500 is near record highs.

Among the stocks trending in today’s sea of optimism are Best Buy Co Inc (NYSE:BBY), J M Smucker Co (NYSE:SJM), Monsanto Company (NYSE:MON), Amazon.com, Inc. (NASDAQ:AMZN), and Toll Brothers Inc (NYSE:TOL). Let’s take a closer look at the latest concerning each stock and see how hedge funds are positioned in 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 here).

Best Buy Spikes on Earnings

Best Buy Co Inc (NYSE:BBY) shares are 15% in the green today after the electronics retailer reported better-than-expected second quarter earnings. For the time period, Best Buy earned $0.57 per share on revenue of $8.53 billion, toppling estimates of $0.43 per share and $8.4 billion. Comparable-store sales rose by 0.8% year-over-year and management raised its third quarter EPS outlook to $0.43-to-$0.47, which neatly envelops the analyst estimate of $0.45 per share. Of the 749 hedge funds we track that filed 13F’s for the June 30 reporting period, 29 of them owned shares of Best Buy Co Inc (NYSE:BBY) at the end of June, up by one fund from the end of March.

Smucker’s Results Come in Below Expectations

J M Smucker Co (NYSE:SJM) shares have retreated by over 8% in morning trading after the food manufacturer reported first quarter of fiscal year 2017 earnings of $1.86 per share on revenue of $1.82 billion. Although J M Smucker’s earnings beat estimates by a healthy $0.12 per share, its revenue missed the mark by $70 million and fell by 6.7% year-over-year, mostly due to the impact of the divested U.S. canned milk business and price declines. Management’s outlook was stable on the earnings front at least, with expectations of fiscal year 2017 EPS of $7.60-to-$7.75 per share. The number of funds in our database with J M Smucker Co (NYSE:SJM) holdings rose by three quarter-over-quarter to 30 as of the end of June.

On the next page, we’ll take a closer look at what’s happening with Monsanto, Amazon, and Toll Brothers.

Monsanto-Bayer Talks Advance

According to Bloomberg, Monsanto Company (NYSE:MON) and Bayer AG’s talks about a potential merger are advancing, with the CEO’s of both companies having held a series of constructive meetings in recent weeks. According to people in the know, a potential deal could be struck over the next two weeks, although there is still the possibility that the negotiations could fall apart. Monsanto previously rejected Bayer’s $125 per share buyout offer as being inadequate. The smart money was exceptionally bullish on Monsanto Company (NYSE:MON) during the second quarter, as 87 top funds held a long position in the company at the end of the second quarter, up by 36 funds quarter-over-quarter.

Amazon Mulls Echo-Only Music Service

Everything store Amazon.com, Inc. (NASDAQ:AMZN) is in the spotlight today after Recode reported that the e-commerce giant is considering selling an Echo-only, all-you-can-stream-with-no-ads music service for significantly cheaper than what Spotify currently charges ($10 per month). Although the exact pricing of the service isn’t clear, some analysts think that Amazon is aiming for a subscription fee of about $4-to-$5 per month. If successful, the service will ensure greater consumer lock-in for Echo, which in turn would help Amazon sell more goods. Andreas Halvorsen’s Viking Global reported owning a stake of over 3 million shares of Amazon.com, Inc. (NASDAQ:AMZN) as of the end of the second quarter.

Toll Brothers Rises on Earnings

Toll Brothers Inc (NYSE:TOL) is 2.6% in the green today after the company reported relatively in-line financial results for the third quarter of its fiscal year 2016. For the three-month period, Toll Brothers earned $0.61 per share on sales of $1.27 billion, versus EPS estimates of $0.61 per share and sales of $1.25 billion. Revenue rose by 23% year-over-year and guidance was in-line with estimates, as the U.S. housing market remains strong. For its full fiscal year, Toll Brothers expects revenue of $4.96 billion-to-$5.27 billion, eclipsing the consensus analyst estimate of $5.04 billion at the mid-point of its range. Matthew Tewksbury’s Stevens Capital Management hiked its Toll Brothers stake by 483% to 329,721 shares during the second quarter.

Disclosure: None