All three indexes are in the green today, thanks in part to solid results from several banks which reported their latest quarterly results this morning.
Among the stocks that are also trending are another bank which did not report results today, Goldman Sachs Group Inc (NYSE:GS), and four other companies, Tesla Motors Inc (NASDAQ:TSLA), SolarCity Corp (NASDAQ:SCTY), Whiting Petroleum Corp (NYSE:WLL), and Nike Inc (NYSE:NKE). Let’s take a closer look at why traders are focused on these stocks today and also analyze hedge fund sentiment towards them.
While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).
While it didn’t report earnings today, Goldman Sachs Group Inc (NYSE:GS) is nevertheless almost 2% in the green due to its peers’ strong results. Due to the earnings beats out of JPMorgan Chase & Co. (NYSE:JPM) and others, expectations for Goldman Sachs’ own results have increased, pushing its shares higher (though ironically enough, JPMorgan and Wells Fargo & Co (NYSE:WFC) own shares are down slightly today on their strong results). In addition, Goldman Sachs is trending on the account of the bank recently opening Marcus.com, an online lending platform where qualified borrowers can get loans of up to $30,000 for various uses. Although online lending isn’t exactly the most profitable business in the world, it could be a big future growth area going forward and could improve Goldman Sachs’ image among the general public. Warren Buffett’s Berkshire Hathaway owned 10.96 million shares of Goldman Sachs Group Inc (NYSE:GS) at the end of June.
Tesla Motors Inc (NASDAQ:TSLA) is trending after Germany’s Federal Motor Authority sent a letter to Tesla owners warning them that the company’s ‘Autopilot’ function is just an assistance system and that drivers should pay attention to the road at all times. The warning letter is just the latest piece of non-positive news concerning Tesla’s ‘Autopilot’ function, which many have criticized for coming to market too early.
In addition, Tesla and SolarCity Corp (NASDAQ:SCTY) are in the spotlight due to a recent Oppenheimer comment that the two may need $12.5 billion for capital expenditures through 2018 through a combination of tax equity, system refinancing, corporate debt, asset-based debt, and other means. Despite the large capex requirement, Oppenheimer analyst Colin Rusch thinks that the probability of shareholders approving the Tesla/SolarCity merger on November 17 has increased. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 36 were long Tesla Motors Inc (NASDAQ:TSLA) on June 30, while 26 were shareholders of SolarCity Corp (NASDAQ:SCTY).
On the next page, we’ll see why traders have been buzzing about Whiting Petroleum Corp and Nike Inc.