Why Traders Are Buzzing About MGM, Apple, and Three Other Companies Today

Although crude futures are well in the green, the three indexes have opened in the red on Friday. The Dow and S&P 500 are off by 0.2% while the NASDAQ index has lost around 0.50%.

In this article, we take a closer look at five stocks that are buzzing today, including MGM Resorts International (NYSE:MGM), BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), Apple Inc. (NASDAQ:AAPL), Elizabeth Arden, Inc. (NASDAQ:RDEN), and Revlon Inc (NYSE:REV) and see how elite funds are positioned among them.

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).

Higher EBITDA Seen at MGM 

MGM Resorts International (NYSE:MGM) shares have advanced by around 2% after the company said that its profit growth plan will deliver $400 million in additional EBITDA per year, up from the previous $300 million. Following the announcement, analysts at Telsey Advisory Group raised their price target to $29 from $27 and reiterated their ‘Outperform’ rating. MGM shares are up 6% year-to-date so far. Among the funds we track, 55 funds owned $2.03 billion worth of MGM Resorts International (NYSE:MGM)’s stock, which accounted for 16.70% of the float on March 31, versus 49 funds and $2.12 billion, respectively, on December 31.

Rumors Send BioMarin Shares Higher

BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is 2.4% in the green today on the back of rumors that Sanofi SA (ADR) (NYSE:SNY) might be interested in buying the company. BioMarin has several drugs on the market and in its pipeline for patients with serious rare and ultra-rare genetic diseases, including Vimizim for Morquio A Syndrome and Kuvan for PKU. Shares of the company are down around 20% year-to-date. A total of 44 funds from our database owned shares of BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) at the end of the first quarter, up by one over the quarter.

On the next page, we examine Apple, Elizabeth Arden, and Revlon.
City of Beijing Rules Against Apple

Apple Inc. (NASDAQ:AAPL)‘s China problems may not be over. Shares of the company are off by 1.7% in morning trading on the news that Beijing officials have ordered the halt of sales of the iPhone 6 and iPhone 6 Plus in the city. The officials have ordered a halt because a court has ruled the two phone’s designs infringe on a patent by a Chinese company. Apple has appealed and, according to reports, all Apple products are still for sale across the country. China is a key market for Apple and the company needs to have good relations with the government. David Einhorn’s Greenlight Capital was one of the top shareholders of Apple Inc. (NASDAQ:AAPL) at the end of March.

M&A Activity in Beauty Sector 

Revlon Inc (NYSE:REV) is buying Elizabeth Arden, Inc. (NASDAQ:RDEN) for $14 in cash per share, representing an enterprise value for Elizabeth Arden of around $870 million. Revlon shares are up by 9% and Elizabeth Arden shares have surged by 47% on the back of the news. Revlon’s management estimates that the acquisition of Elizabeth Arden will deliver $140 million in annual cost synergies and will create a combined company with greater scale, a more diversified product line, and an expanded global footprint. Revlon expects pro-forma leverage to be 4.2x Net Debt/Adjusted EBITDA by the end of this year. Nine funds from our database were bullish on Revlon Inc (NYSE:REV) and the same number of funds was long Elizabeth Arden, Inc. (NASDAQ:RDEN) at the end of the first quarter.

Disclosure: none