It’s been a positive day on Wall Street thus far ahead of the opening bell, as all three index futures are in the green and crude futures are now at $51 per barrel in the pre-market. Traders appear to be hopeful that tomorrow’s jobless claims release and next week’s FOMC meeting will placate fears that the U.S economy might hit a rough patch soon. Among the stocks that are buzzing today are Yahoo! Inc. (NASDAQ:YHOO), VeriFone Systems Inc (NYSE:PAY), LendingClub Corp (NYSE:LC), Gevo, Inc. (NASDAQ:GEVO), and Skullcandy Inc (NASDAQ:SKUL). Let’s take a closer look at each stock and see how elite funds are positioned in them.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).
According to the Wall Street Journal, Yahoo! Inc. (NASDAQ:YHOO) is auctioning off its portfolio of around 3,000 patents. Some of the patents concern e-commerce, search technology, and ad-matching that might be useful to Microsoft Corporation (NASDAQ:MSFT) or Alphabet Inc (NASDAQ:GOOG). Other patents could be attractive to private equity funds. Analysts expect the patents to garner more than $1 billion when all is said and done. Yahoo! Inc. (NASDAQ:YHOO) is selling off its core internet business and patents to unlock shareholder value. The market hasn’t assigned Yahoo’s core internet business much of a valuation, so a sale will force the market to do so. Of the 766 elite funds in our database, 97 owned shares of Yahoo at the end of the first quarter, up from 84 at the end of 2015.
VeriFone Drops After Earnings Miss
VeriFone Systems Inc (NYSE:PAY) is almost 30% lower in pre-market trading after reporting its fiscal year 2016 second quarter results and issuing guidance for the remainder of the fiscal year. For the fiscal second quarter, VeriFone earned $0.47 per share on revenue of $532 million, missing estimates by $0.05 per share on the bottom-line but beating them by $1.9 million on the top-line. Revenue grew by 8.5% year-over-year, while adjusted gross margin fell by 40 basis points. Guidance was soft, with management expecting fiscal third quarter EPS of $0.40 on revenue of $515 million, well beneath estimates of EPS of $0.59 on revenue of $552.1 million. For the full fiscal year, the company expects $1.85 in EPS on revenue of $2.10 billion, below estimates of $2.23 in EPS on sales of $2.16 billion. Jim Simons‘ Renaissance Technologies trimmed its stake in VeriFone Systems Inc (NYSE:PAY) by 63% in the first quarter, to 436,319 shares as of the end of March.
Founder Wants to Take LendingClub Private
According to Reuters, LendingClub Corp (NYSE:LC)‘s former CEO Renaud Laplanche has talked with various private equity funds and banks about securing enough financing to buy out the beleaguered online lending company and take it private. Laplanche left LendingClub in May after the company found that the executive had taken actions that were potentially in violation of the company’s business practices. Given the regulatory scrutiny around LendingClub and around Laplanche’s exit, the former CEO may have a harder time raising the funds needed to make a bid. The talks are preliminary and there is no guarantee of a deal. LendingClub rescheduled annual meeting is now set for June 28. 23 funds that we track owned shares of LendingClub Corp (NYSE:LC) at the end of the first quarter, up by five from the end of the previous quarter. LendingClub shares are up by 6% in pre-market trading.
Gevo’s Momentum Continues
A day after nano-cap Gevo, Inc. (NASDAQ:GEVO)‘s shares surged by 50% on the news that Alaska Air Group, Inc. (NYSE:ALK) flew the first commercial flight using Gevo’s renewable alcohol-to-jet fuel technology, Gevo, Inc. (NASDAQ:GEVO) shares look poised to rally further out of the morning gate. Shares of the company are up by almost 98% in the pre-market, as speculators and technical traders chase momentum. Alaska Airlines estimates that the 20% biofuel blend it is using for the maiden flights could reduce greenhouse emissions by around 50%. Of the funds in our database, just two owned shares of Gevo, Inc. (NASDAQ:GEVO) at the end of the first quarter. As with all nano-caps, investors should exercise due-diligence before buying or selling.
Skullcandy Rallies on SEC Filing
Skullcandy Inc (NASDAQ:SKUL) is considerably higher in the pre-market on light volume after founder Rick Alden disclosed in a 13D filing that firms associated with him own 12.7% of the company. In the 13D, Alden also said that he is, “determined to explore potential transactions in which he may cause one of his affiliates to make an offer to purchase some or all of the shares of the Issuer’s Common Stock.” The number of funds in our system long Skullcandy Inc (NASDAQ:SKUL) rose by one quarter-over-quarter to 12 as of the end of March.