The US stock market plunged after the bell on the back of April nonfarm payrolls data, which showed that 160,000 jobs were created last month, versus 200,000 expected. However, after oil gained ground, the main indices recovered and are currently close to flat. Meanwhile, among the stocks that are making headlines today are Herbalife Ltd. (NYSE:HLF), Walgreens Boots Alliance Inc (NASDAQ:WBA), Facebook Inc (NASDAQ:FB), Medivation Inc (NASDAQ:MDVN), and Sanofi SA (ADR) (NYSE:SNY). Let’s take a closer look at the events that put these stocks in the spotlight on Friday and see how the smart money investors have been trading them.
At Insider Monkey, we track almost 800 hedge funds and other institutional investors and every quarter we analyze their equity portfolio to see which stocks they are collectively bullish on. By focusing on the small-cap space, we determine stocks that enjoy most support and use them in our small-cap strategy (see more details here).
Herbalife Ltd. (NYSE:HLF)’s stock is among big gainers today, having appreciated by over 11% on the back of the company’s announcement that it had advanced its talks with the US Federal Trade Commission and could face a $200 million payment if the investigation ends in a settlement. The FTC has been investigating Herbalife Ltd. (NYSE:HLF)’s marketing practices, which involve independent distributors to sell its products. The company also posted its financial results for the first quarter yesterday and managed to beat the estimates with EPS of $1.36 on revenue of $1.12 billion, compared to expectations of $1.09 and $1.07 billion respectively. The news probably has probably disappointed Bill Ackman, who in 2012 made a $1.0 billion bet against Herbalife Ltd. (NYSE:HLF) and tried to convince investors that the company is engaged in illegal operations. On the other hand, 31 other funds from our database were bullish on Herbalife at the end of 2015, including Carl Icahn’s Icahn Capital, which owned 17.0 million shares.
On the other hand, Walgreens Boots Alliance Inc (NASDAQ:WBA)’s stock has declined by over 3% after the company announced a secondary offering of 15.0 million shares by affiliates of Kohlberg Kravis Roberts & Co. The offering also includes 1.50 million shares as over-allotment options. Walgreens Boots Alliance Inc (NASDAQ:WBA) will not gain any proceeds from the offering. Heading into 2016, 78 funds among those tracked by Insider Monkey held around 7.40% of Walgreens Boots Alliance’s stock.
On the next page, we are going to take a closer look at the latest developments surrounding Facebook Inc (NASDAQ:FB), and Medivation Inc (NASDAQ:MDVN), and Sanofi SA (ADR) (NYSE:SNY), which have been in the news lately in connection with a possible M&A deal.
Shares of Facebook Inc (NASDAQ:FB) are trading slightly in the green on below-average volume. However, the stock has been in the headlines in connection with a lawsuit that claims the social network company invades users’ privacy by using facial recognition technology for photo-tagging. Facebook had asked for the lawsuit to be dismissed, but a federal judge in San Francisco rejected the request yesterday. The company is in breach of the Biometric Information Privacy Act passed in 2008 in Illionois, which states that companies have to get a consent from consumers before collecting biometric data, such as ‘faceprints’ that are used by Facebook and Google (among other companies) to identify people in photos. Facebook Inc (NASDAQ:FB) contradicts that photo-tagging is mentioned in its terms of service and users are allowed not to use the feature. Columbus Circle Investors and Fisher Asset Management reported holding 2.80 million shares and 256,520 shares of Facebook Inc (NASDAQ:FB) as of the end of March. Both investors trimmed their exposure to the company during the first quarter.
Medivation Inc (NASDAQ:MDVN) and Sanofi SA (ADR) (NYSE:SNY) have gained attention in the media since April 28, when Sanofi announced an unsolicited bid of $52.50 per share to acquire Medivation (see article). The deal was rejected immediately due to the low price. Yesterday, Sanofi SA (ADR) (NYSE:SNY) disclosed a letter sent to Medivation Inc (NASDAQ:MDVN)’s board, in which it said that following talks with the latter’s top shareholders, which support the deal. In this way, Sanofi SA (ADR) (NYSE:SNY) plans to go through with the deal using any measures, including engaging in talks with shareholders, and ousting and replacing the entire board of directors. A total of 34 funds from our database held shares of Medivation Inc (NASDAQ:MDVN) at the end of 2015, having amassed over 17% of the company’s outstanding stock. In Sanofi SA (ADR) (NYSE:SNY), 31 funds held less than 1% of the stock.