The US stock market further declined on Tuesday, as declining global growth continues to dent the sentiment. The International Monetary Fund’s Chief, Christine Lagarde, in a speech on Tuesday, said that the global recovery remains slow. Lack of consensus among major oil producers regarding a freeze in oil production is also inching the markets down. Among the stocks in the spotlight today are Allergan plc Ordinary Shares (NYSE:AGN), Pfizer Inc. (NYSE:PFE), Tesla Motors Inc (NASDAQ:TSLA), Sprint Corp (NYSE:S) and Amazon.com, Inc. (NASDAQ:AMZN).
At Insider Monkey, we track around 790 hedge funds and other 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).
Allergan plc Ordinary Shares (NYSE:AGN)’s stock has declined by approximately 17% following news regarding new regulations by the US treasury affecting tax inversion deals. The new rules are likely to impact the $160 billion merger of Allergan and Pfizer Inc. (NYSE:PFE) because they make it difficult for the corporations to move their headquarters to another country for tax avoidance purposes. Analysts think that the recent revision of policies by the US government might put the merger into jeopardy. However, both companies issued a joint statement and said that they are “reviewing the US Department of Treasury’s announcement,” and cannot speculate anything about the impact of the new policies on the deal before the complete review process. Pfizer Inc. (NYSE:PFE)’s stock has gained approximately 2% so far today.
Out of the funds we track, 159 funds held positions with a total value of $22.2 billion in Allergan at the end of the fourth quarter of 2015, which made it the most popular stock among the funds in our database. Pfizer also ranked among the most popular stocks with 109 funds holding around $8.6 billion worth of shares. Ken Fisher’s Fisher Asset Management is one of the most notable stakeholders in Pfizer, with an ownership of approximately 32 million shares.