Why Wells Fargo, Gilead, Newfield, Amgen, and Chesapeake Energy Are Trending

All three indexes are in the green today after U.S. consumer confidence jumped to its highest figure in nine years during September. According to the Conference Board, the consumer confidence index inched up to 104.1 this month, up from 101.8 in August.

Among the stocks that are commanding attention from traders are several energy companies, two healthcare giants, and one bank. In this article, we’ll take a closer look at Wells Fargo & Co (NYSE:WFC), Gilead Sciences, Inc. (NASDAQ:GILD), Newfield Exploration Co. (NYSE:NFX), Amgen, Inc. (NASDAQ:AMGN), and Chesapeake Energy Corporation (NYSE:CHK) and see what the smart money thinks of each stock.

At Insider Monkey, we track around 750 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details here).

Wells Fargo & Co (NYSE:WFC) is trending after the Wall Street Journal reported that the bank’s Board is considering implementing executive claw-backs that might result in pay cuts for CEO John Stumpf and former retail head Carrie Tolstedt. News of the clawbacks comes after various politicians on Capitol Hill specifically requested such action be taken. If the Board claws back the compensation for some of its executives, bulls hope that Wells Fargo’s shady sales tactics scandal will fade from the limelight and that its stock will bounce back. Warren Buffett’s Berkshire Hathaway owns around 10% of Wells Fargo & Co (NYSE:WFC)’s shares as of June 30.

Gilead Sciences, Inc. (NASDAQ:GILD) shares are down by 2% after Leerink analyst Geoffrey Porges lowered his rating on the stock to ‘Market Perform’ from ‘Outperform’ and also set a price target of $94 per share on it, down from the previous target of $112. Porges is bearish on Gilead’s Hep C business, as he thinks sales will “decline faster and farther” than what The Street estimates. Of the 749 hedge funds that we track which filed 13Fs for the latest reporting period, 85 of them were long Gilead Sciences, Inc. (NASDAQ:GILD) at the end of June, down by eight funds quarter-over-quarter.

On the next page we’ll find out why traders are talking about Newfield Exploration, Amgen, and Chesapeake Energy.

Newfield Exploration Co. (NYSE:NFX) is on many watchlists after OPEC failed to agree to terms that would result in a freeze in production. Due to the group’s failure to achieve a consensus, WTI futures are down by 3.5% and Newfield shares are off by 2.7%. In addition, the company has also reiterated it previous production guidance for the third quarter of 2016, after the successful closing of its previously disclosed sale of some Texas assets for around $380 million. 45 funds in our database were long Newfield Exploration Co. (NYSE:NFX) as of the most recent 13F reporting period date.

Amgen, Inc. (NASDAQ:AMGN) is 1.2% in the red after the company announced disappointing top-line results from a Phase 3 trial evaluating Kyprolis, prednisone, and melphalan versus Velcade, prednisone and melphalan for patients with a certain form of multiple myeloma. Unfortunately, the trial did not show superiority in terms of progression-free survival and did not meet the primary endpoint. Some analysts, while disappointed, are awaiting more information from another Phase 3 trial before making a final judgement. 58 funds that we track had a long position in Amgen, Inc. (NASDAQ:AMGN) at the end of June, down by two funds from the end of March.

Like Newfield Exploration, Chesapeake Energy Corporation (NYSE:CHK) shares are down substantially due to OPEC’s failure to freeze production during a meeting in Algeria. As a result, WTI futures are off by more than 3.5% and Chesapeake shares have sunk by over 8%. Also hurting sentiment is the news that Vincent Intrieri and John Lipinski have both resigned from the company’s Board, effective September 26. Intrieri is regarded by some traders as a representative of Carl Icahn of Icahn Capital, which, along with partners, recently cut its stake in the company to 35.3 million shares from the previous total of 73 million shares. 31 funds that we track owned $696.95 million worth of Chesapeake Energy Corporation (NYSE:CHK) shares at the end of June, which accounted for 23.80% of the float.

Disclosure: None