After several consecutive days of declining, the markets are calmer in the pre-market as sentiment in Britain for staying in the EU has improved. The three major indexes are only modestly in the red and crude futures are well in the green.
Among the stocks in the spotlight today are McDonald’s Corporation (NYSE:MCD), Albemarle Corporation (NYSE:ALB), FedEx Corporation (NYSE:FDX), Lifelock Inc (NYSE:LOCK), and E*TRADE Financial Corp (NASDAQ:ETFC). Let’s find out why each stock is buzzing and see what elite funds think of them.
Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 760 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).
McDonald’s Corporation (NYSE:MCD)
According to the New York Post, McDonald’s Corporation (NYSE:MCD) is outsourcing some jobs to India as part of its $500 million cost reduction program. One of the first cuts in the effort will be closing a regional office in Columbus. Overall, the positions of 70 workers at the facility could be outsourced to an Indian firm. The cost reduction program should help increase McDonald’s return on capital. A total of 83 funds from our database owned shares of McDonald’s Corporation (NYSE:MCD) at the end of March.
Albemarle to Sell Unit
Global specialty chemical company Albemarle Corporation (NYSE:ALB) is selling its Chemetall Surface Treatment business to BASF for around $3.2 Billion. The deal represents a last twelve month EBITDA multiple of 15.3x as of the end of March and continues Albemarie’s commitment to maximize shareholder value by reducing leverage, return capital to shareholders, and investing in high priority businesses. At the end of March, 28 funds tracked by us had a long position in Albemarle Corporation (NYSE:ALB) at the end of the first quarter.
On the next page, we examine FedEx Corporation, Lifelock Inc, and E*TRADE Financial Corp.