Why Chipotle, CarMax, Tesla, Wal-Mart, and More Are Trending

Wall Street is calm once again today, as all three major indexes have opened in the green. Helping sentiment was a largely bullish crude inventory report from the API yesterday.

In this article, we’ll take a closer look at Chipotle Mexican Grill, Inc. (NYSE:CMG), CarMax, Inc (NYSE:KMX), Wal-Mart Stores, Inc. (NYSE:WMT), Target Corporation (NYSE:TGT), and Tesla Motors Inc (NASDAQ:TSLA), five stocks that investors are buzzing about this morning, and use the latest regulatory filings to determine how the smart money has been trading each stock.

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).

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Chipotle Mexican Grill, Inc. (NYSE:CMG) shares are slightly in the red on the back of some bearish Goldman Sachs commentary. Due to online search trends for the company’s Chiptopia event showing a noticeable dropoff for the month of August, Goldman analyst Karen Holthouse trimmed her fourth quarter comparable-store sales estimate to a 21.4% year-over-year decline, versus the previous estimate of an 18.4% decline. The analyst also lowered her target price on the stock to $395 per share from the previous mark of $445. Some smart money funds understandably disagree, as our records show that Bill Ackman‘s Pershing Square owns around 9.9% of Chipotle Mexican Grill, Inc. (NYSE:CMG)’s shares.

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CarMax, Inc (NYSE:KMX) is off by over 4% today after the company reported disappointing fiscal year 2017 second quarter results. For the period, CarMax earned $0.84 per share, versus estimates of $0.88. Although the company’s sales rose by 3.1% year-over-year to $4 billion, CarMax’s top-line still missed the consensus target by $90 million. One reason for the soft performance was the average selling price for used vehicles for the period, which inched lower by 2.3% to $19,530. Meanwhile, the average selling price of a wholesale vehicle also fell by 4.1%. In terms of guidance, CarMax’s management expects to open 15 new stores and to spend around $450 million in capex for its 2017 fiscal year. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 21 funds were long $951.66 million worth of CarMax, Inc (NYSE:KMX) shares on June 30, which accounted for 10.00% of the float.

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On the next page, we’ll examine why Wal-Mart, Target, and Tesla are in the spotlight today.