Wall Street is in an optimistic mood as all three indexes are considerably higher than yesterday’s close. The Dow Jones is S&P 500 and NASDAQ have gained ground and are close to 1% in the green.
Among the stocks trending today are Macy’s, Inc. (NYSE:M), Potash Corporation of Saskatchewan (USA) (NYSE:POT), Mosaic Co (NYSE:MOS), Home Depot Inc (NYSE:HD), and Barnes & Noble, Inc. (NYSE:BKS). Let’s take a closer look at each stock and see what elite funds think of the five.
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).
Macy’s Finds a New CEO
Macy’s, Inc. (NYSE:M)’s shares have gained around 2% after the company announced its CEO succession plan. According to the retailer, Jeff Gennette will replace Terry J. Lundgren as the company’s CEO in the first quarter of 2017. Gennette had been the President of Macy’s since 2014. Although he will relinquish the CEO spot, Lundgren will nevertheless remain Executive Chairman of the board. Of the 766 elite funds we track, 55 funds owned $1.38 billion worth of Macy’s, Inc. (NYSE:M)’s stock, which accounted for 9.90% of the float on March 31, versus 51 funds and $1.16 billion, respectively, on December 31.
Shares of Potash Producers Spike on Hints of Production Coopoeration
Potash Corporation of Saskatchewan (USA) (NYSE:POT) and Mosaic Co (NYSE:MOS) shares are 6% and 5% in the green after Reuters reported that Belarus might cooperate with Russian Uralkali. The two parties originally worked together to keep prices high before splitting up in 2013. Now that potash prices are so low, it seems that the two sides are considering forming a cartel again. Belarus president Alexander Lukashenko said:
“New Uralkali shareholders are coming to me every month saying: ‘accept us’. We are not against it – let’s unite, on our conditions. Let’s resume work and agree how much we will produce.”
If there is a production limit deal, look for potash spot prices to rise higher. Among the funds we track, 23 funds had a bullish position in Potash Corporation of Saskatchewan (USA) (NYSE:POT) and 21 funds owned shares of Mosaic Co (NYSE:MOS) at the end of the first quarter.
On the next page, we examine Home Depot, and Barnes & Noble.
Home Depot Gets an Upgrade
Home Depot Inc (NYSE:HD) shares are in the green today after Nomura analyst Jessica Schoen Mace upgraded the stock to ‘Buy’ from ‘Neutral’ and raised her price target to $155 from $140. Mace likes Home Depot’s competitive advantages, strong management team, and solid underlying market. Mace thinks the retailer will make $6.33 in EPS in 2016, up from the previous $6.30 per share. At the end of March, 74 funds in our database were long Home Depot Inc (NYSE:HD) at the end of March, up by 12 funds from the previous quarter.
Barnes & Noble Reports Earnings
Barnes & Noble, Inc. (NYSE:BKS)’s shares have surged by over 8% so far today after the book retailer reported a loss of $0.24 per share on revenue of $876.68 million for its fiscal fourth quarter. The bottom-line results are in-line with analyst estimates while the top-line results missed the expectations by $12.51 million. Core comparable store sales inched up by 0.4%, while full year-comparable store sales were flat. Adjusted fiscal 2016 consolidated net earnings from continuing operations amounted to $0.35 per share. The company expects between $200 million and $250 million in full year consolidated EBITDA for fiscal year 2017. A total of 21 funds tracked by us had a bullish position in Barnes & Noble, Inc. (NYSE:BKS) at the end of March.