Why Viacom, Facebook, Tesla, and Two Other Stocks are in Spotlight Today

Crude futures are again in the green today as the market continues to digest last Wednesday’s surprise OPEC announcement.

Starting off the beginning of the fourth quarter, we will analyze why five stocks, Viacom, Inc. (NASDAQ:VIAB), CBS Corporation (NYSE:CBS), Facebook Inc (NASDAQ:FB), Tesla Motors Inc (NASDAQ:TSLA), and Chevron Corporation (NYSE:CVX), are in the spotlight today and we will analyze the hedge fund sentiment towards them based on data from the last round of 13F filings.

Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 700 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).

In response to controlling shareholder National Amusement’s request, the boards of Viacom, Inc. (NASDAQ:VIAB) and CBS Corporation (NYSE:CBS) have set up special committees to review the potential merger between the two. According to the Wall Street Journal, the committees will decide if the combination between the two makes sense and on what terms should the two companies combine. If the two do merge, they will have gone full circle in just over a decade. Viacom was separated from CBS in 2006. Of the around 749 top funds that we track, 41 investors were long Viacom, Inc. (NASDAQ:VIAB) and 59 funds held shares of CBS Corporation (NYSE:CBS) at the end of June.

Facebook Inc (NASDAQ:FB) is in the spotlight today for reportedly adopting a similar feature to SnapChat’s Stories format for Messenger. The feature, called ‘Messenger Day’, allows users to share filtered videos and photos that delete in one day. However, the feature isn’t widespread yet, as TechCrunch reported that the Messenger Day feature is currently available only in Poland. The addition of the ephemeral feature to Messenger isn’t the first time that Facebook has taken some inspiration from Snapchat. Facebook’s Instagram has also added some ephemeral video/photo features earlier in the year. Meanwhile, Facebook Inc (NASDAQ:FB), is doing some damage control with its major ad buyers, promising it is committed to ‘trust and transparency’ with its partners and customers. On another front, Facebook is taking another stab at e-commerce by introducing ‘marketplace’, a service designed to compete against Craigslist. According to our records, Mark Zuckerberg’s company is the smart money’s favorite tech stock with 148 funds reporting long stakes as of the end of the second quarter.

On the next page, we find out why Tesla Motors, and Chevron Corporation are trending.

Tesla Motors Inc (NASDAQ:TSLA) shares are in the green after the company reported that it delivered around 24,500 vehicles in the third quarter, which included 8,700 Model X and 15,800 Model S. The deliveries are up by around 70% year-over-year and evidently better than the market’s estimates (hence the positive price action). In addition, around 5,500 vehicles were in transit to buyers, and won’t be counted as deliveries until the fourth quarter. Tesla maintains its previous guidance of 50,000 vehicles for the second half of 2016. A total of 36 funds from our database were long Tesla Motors Inc (NASDAQ:TSLA) at the end of June, down by three funds from the previous quarter.

Last but not least, Chevron Corporation (NYSE:CVX) is trending after the Wall Street Journal reported that ‘a number’ of Japanese and Indonesian companies are considering bidding for Chevron’s geothermal assets in Indonesia, which could bring in around $2 billion to the super-major, according to some analyst estimates. Overall, Chevron is considering divesting around $5 billion of its non-core assets in Asia and $10 billion globally to improve its balance sheet and to shore up its cash flow. Ken Fisher’s Fisher Asset Management owned 3.66 million shares of Chevron Corporation (NYSE:CVX) at the end of June.

Disclosure: none