Why These Stocks Are in Spotlight Today

Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track almost 800 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).

Gannett Raises Its Bid for Tribune

Gannett Co Inc (NYSE:GCI) raised its bid for Tribune Publishing Co (NYSE:TPUB) to $15 in cash per share from the previous $12.25 on Monday as the owner of USA today tries to consolidate the newspaper sector. Gannett raised its offer after analyzing certain information revealed in Tribune’s financials filed on May 5. After reviewing the information, Gannett came away with greater confidence that a merger between the two could yield additional operation improvements that could justify the transaction. Although Tribune’s board of directors previously rejected Gannett Co Inc (NYSE:GCI)’s $12.25 per share offer and its management recently adopted a poison pill plan to prevent hostile takeovers, it is uncertain whether they will reject Gannett’s newly enhanced one. Some of the newspaper’s shareholders would like Tribune Publishing Co (NYSE:TPUB) to at least negotiate. Tribune shares opened up 20% higher on the news. Out of the 786 top funds that Insider Monkey tracks in its database, 16 funds owned $203.12 million of Gannett Co while 9 funds owned $48.22 million worth of Tribune’s stock at the end of December.

On the next page, we will take a look at Terex Corporation, Bank of America Corp, and Caesars Entertainment Corp.

Merger Changes For Terex 

Terex Corporation (NYSE:TEX)’s stock is almost 9% higher in morning trading after Konecranes scrapped the full merger between the two and agreed to buy Terex’s ports-solutions and material-handling for $820 million in cash and 19.6 million shares instead. That is roughly $1.3 billion based on Friday close prices. The scrapping of the merger allows Terex Corporation (NYSE:TEX) to sell the rest of itself to China’s Zoomlion Heavy Industry Science & Technology instead. Zoomlion previously offered to buy the entire company for $31 in cash per share. It is unclear how much Zoomlion is willing to pay for the rest of the business. A total of 19 funds from our database owned shares of Terex at the end of 2015.

Analyst Downgrade At Bank of America 

Investors have largely brushed off KBW’s downgrade of Bank of America Corp (NYSE:BAC) today, as shares of the bank are 0.5% in the green in morning trading. The analysts at KBW downgraded the bank to ‘Market Perform’ from ‘Outperform’ noting that Bank of America has tough work to do to improve returns. KBW still has a $16 price target on the shares, however. Investors generally expect Bank of America Corp (NYSE:BAC) to do well if interest rates rise and the economy holds up. Of the 786 elite funds we track, 113 funds owned $6.8 billion of Bank of America Corp (NYSE:BAC) and accounted for 3.90% of the float on December 31, versus 108 funds and $6.45 billion on September 30.

Caesars Receives Some Bids For Unit

According to various sources, Caesars Entertainment Corp (NASDAQ:CZR) has received several unsolicited offers for its interactive entertainment unit, which includes social gaming, and the World Series of Poker brand, among other businesses. The offers are reportedly in excess of $4 billion. Given that Caesars Entertainment Corp (NASDAQ:CZR) has substantial debt, the company’s management is considering the offer. Shares of the company are flat in morning trading. According to our records, 19 elite funds owned 29.70% of the company’s float at the end of 2015.

Disclosure: none