Why Microsoft, Nokia, Spherix, Dynegy, and Best Buy Are Making Moves Today

The major U.S stock indexes are trading up on Wednesday afternoon, helped by surging oil prices and the resulting spike in energy stocks, which were already coming off of very strong gains on Tuesday. Materials stocks are also driving the rise in the markets today. Among the day’s trending stocks are Nokia Corp (ADR) (NYSE:NOK), Spherix Inc (NASDAQ:SPEX), Dynegy Inc. (NYSE:DYN), Best Buy Co Inc (NYSE:BBY), and Microsoft Corporation (NASDAQ:MSFT), not all of which are enjoying the day’s overall gains. We’ll check out what’s happening with them in this article and see what the hedge funds in our database think about these companies.

At Insider Monkey, we track around 760 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 more details about our small-cap strategy).

Nokia Surges On 5G Talks, Upgrade

Let’s start with Nokia Corp (ADR) (NYSE:NOK), which is up by more than 4% this afternoon, driven by several events. First off, it was reported that Nokia Networks is currently holding talks with telecom operators in India to begin testing 5G networks in the country, even though 4G networks have not yet been fully deployed. Milivoj Vela, Nokia Networks Head of Mobile Broadband assured that by 2020, 5G networks will begin to be commercially deployed and will deliver 100Mbps of Internet speed, everywhere. In other news, research firm CLSA upgraded shares of Nokia to ‘Outperform’ from ‘Underperform’, and boosted its price target on the stock by $1.00 to $6.25.

Among the funds that we track, 20 were long Nokia Corp (ADR) (NYSE:NOK) at the end of the first quarter of 2016. The largest stake was held by Jim Simons’ Renaissance Technologies, which disclosed ownership of 15.77 million shares worth roughly $93 million on March 31.

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Spherix Tumbles After Tuesday’s Rally

Opposite to Nokia, Spherix Inc (NASDAQ:SPEX) is trading down, by roughly 11.4% on Wednesday afternoon, after it gained an impressive 60.73% on Tuesday after the announcement of its licensing deal with RPX Corp (NASDAQ:RPXC). However, shares are tumbling today following the release of a letter to shareholders in which the company assured that, aside from the multi-million dollar license agreement, which was “a major milestone for Spherix,” it is “actively exploring viable opportunities outside of the patent monetization space.”

As with most nano-cap companies, Spherix Inc (NASDAQ:SPEX) does not count a lot of hedge fund supporters. In fact, none of the funds that we keep track of disclosed long equity stakes in the company as of the end of the first quarter of the year.

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We’ll cover three more of today’s top market movers on the next page.

Dynegy Tumbles After PJM Auction

Shares of Dynegy Inc. (NYSE:DYN) are trading down by 4.4% on Wednesday, driven by the announcement of the results of PJM Interconnection’s latest auction. As per the report, Dynegy cleared 9,804 megawatts for a weighted average price of $134 per megawatt-day. This sale resulted in roughly $481 million in capacity revenue for the 2019/2020 planning year. The prices were lower than what some analysts were anticipating, which is why shares have dipped today.

For a small-cap, Dynegy Inc. (NYSE:DYN) is quite popular among institutional investors, counting 41 supporters in our database as of March 31. These funds held more than 41% of the company’s shares at the end of the first quarter.

Best Buy Recuperating After Tuesday Hiccup

Back to gainers, we’ve got Best Buy Co Inc (NYSE:BBY), which is up by approximately 4.3% this afternoon, after tumbling on Tuesday following the release of tepid guidance. Two things could be behind Wednesday’s surge: on the one hand, investors could be showing delayed appreciation for the earnings beat reported on Tuesday morning along with the guidance update, which amounted to EPS of $0.44, thumping the Street’s consensus estimate by $0.09; on the other hand, this morning’s announcement of a $0.28 per share quarterly dividend, in-line with the previous dividend, could also be helping the stock.

As of the end of the first quarter of 2016, Best Buy Co Inc (NYSE:BBY) was in the portfolios of 28 funds among those we track. Cliff Asness’ AQR Capital Management, with 5.49 million shares, and Jim Simons’ Renaissance Technologies, which started a new stake comprising 2.34 million shares during the first quarter, were two of the more prominent ones.

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Microsoft Corporation (NASDAQ:MSFT) Continues to Slash Mobile Workforce

Microsoft Corporation (NASDAQ:MSFT) is further cutting its losses in mobile to focus elsewhere. According to the Wall Street Journal, Microsoft will lay off around 1,850 workers and take a restructuring charge of around $950 million. This is in addition to the company’s previous write-down of $7.6 billion and the layoff of 7,800 workers that Microsoft enacted last summer. Microsoft insists however, that it is still committed to the mobile-phone business but that it will focus its efforts on areas where it has more strengths and ‘differentiation’. Microsoft does have a successful tablet product, the Surface, and there are rumors that a Surface phone might come onto the market. Shares of Microsoft are up by 1.44% today.

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Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.