After falling sharply yesterday, the market has bounced back into bull-mode, as all three major indexes have opened well in the green. The Dow Jones is up by over 134 points, while the S&P and Nasdaq have posted 0.5%-to-0.6% gains.
In this article, we’ll examine five stocks that investors are buzzing about this morning, which are Lexmark International Inc (NYSE:LXK), Chevron Corporation (NYSE:CVX), Total SA (ADR) (NYSE:TOT), Canadian Solar Inc. (NASDAQ:CSIQ), and JinkoSolar Holding Co., Ltd. (NYSE:JKS). We’ll also find out what the smart money thinks of each stock by digging deep into the latest SEC filings.
At Insider Monkey, we track over 750 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).
Two energy companies are trending after a court ruled that the Nigerian government can sue Chevron Corporation (NYSE:CVX) and Total SA (ADR) (NYSE:TOT) on allegations of illegally exporting oil to the United States between 2011 and 2014. According to the lawsuit, Nigeria is suing both companies, in addition to several others, for failing to declare the exporting of over 57 million barrels of crude oil during that period. The government says that the oil in question is worth around $13 billion. Due to the low crude prices and the various disruptions caused by rebels in oil-producing parts of the country, the government of Nigeria has fallen under tough times and is looking for any means to raise much-needed money. If found guilty, it is unclear what the oil majors will do. Nigeria is a major oil-producing nation in Africa and the country could one day become a big oil consumer as well.
Of the two super-majors, the smart money liked Chevron Corporation (NYSE:CVX) best on June 30, as 47 out of the 749 funds tracked by Insider Monkey which filed 13Fs for the June 30 reporting period reported holding stakes in the company as of the end of June. Perhaps because it is international, only 16 funds had long positions in Total SA (ADR) (NYSE:TOT).
On the next page we’ll examine why Canadian Solar, JinkoSolar, and Lexmark are in the spotlight today.
Lexmark International Inc (NYSE:LXK) shares have soared by over 13% after The Committee on Foreign Investment in the United States (CFUIS) found that there are no unresolved national security issues associated with Apex Technology and PAG Asia Capital’s proposed acquisition of the company for $40.50 in cash per share. In turn, CFIUS has granted the acquirers and Lexmark approval to proceed with the proposed transaction. Evidently many in the market weren’t counting on the deal’s approval, leading room for the big rally today. Both parties expect the deal to close in 2016. Robert Emil Zoellner‘s Alpine Associates initiated a new stake of over 1.01 million shares in Lexmark International Inc (NYSE:LXK) during the second quarter.
Traders are watching Canadian Solar Inc. (NASDAQ:CSIQ) and JinkoSolar Holding Co., Ltd. (NYSE:JKS) after Bloomberg reported that China’s government plans to trim renewable-energy tariffs according to a report on the website of the China Industrial Association of Power Sources. Due to lower solar production costs, the government could potentially cut solar-power tariffs by 23% or more beginning in 2017. Given that many solar stocks have already been beaten-up this year, it seems that some in the market already anticipated the news. Shares of JinkoSolar are flat, while those of Canadian Solar are off by just 1%.
16 hedge funds that we track were long Canadian Solar Inc. (NASDAQ:CSIQ) on June 30, while just four were shareholders of JinkoSolar Holding Co., Ltd. (NYSE:JKS).