Dividends, Bonds, and Blown Up Wells: Why Chevron, Target and Others Are Attracting Attention Today

It’s another green day in the energy markets as crude futures are standing at around $51 per barrel. Traders are looking forward to today’s EIA weekly release after yesterday’s solid API numbers. Traders are also looking forward to tomorrow’s jobless claims report and next week’s pivotal FOMC meeting. Among the stocks trending today are Chevron Corporation (NYSE:CVX), Vale SA (ADR) (NYSE:VALE), MGIC Investment Corp. (NYSE:MTG), Ford Motor Company (NYSE:F), and Target Corporation (NYSE:TGT). Let’s see why these stocks are turning heads today and check in on how elite funds are positioned among them.

Our research 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).

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The Niger Delta Avengers Strike Again

Chevron Corporation (NYSE:CVX) is in the news after the Niger Delta Avengers, a militant group in Nigeria, blew up one of Chevron’s wells in the country. The Avengers have attacked several oil wells and pipelines over the past few months, which has caused production in the country to fall to 20-year lows. Perhaps due to the financial strain, the Nigerian government said on Tuesday that it will start talks with the militant group. The talks could prove more difficult than a simple payoff, however, as the militant group has said in response that its mission is to “liberate the Niger Delta people.” Chevron Corporation (NYSE:CVX) was in the portfolios of 46 funds in our system at the end of March, out of 766 active funds that Insider Monkey tracks.

Vale Raises Fresh Debt in Healthy Offering

Vale SA (ADR) (NYSE:VALE) has raised $1.25 billion from an overseas bond issuance due June 2021 that yields an annual payout of 5.875%. Demand was greater than supply, with demand numbering $4 billion, or over three-times the amount of debt available. The strong demand illustrates renewed overseas demand for Brazilian companies as the country works hard to dig itself out of a severe recession and political chaos. Vale will use the money raised for general corporate purposes. 26 savvy funds in Insider Monkey’s database owned Vale SA (ADR) (NYSE:VALE) at the end of the first quarter, up by eight from the end of the previous quarter.

On the next page we examine the news surrounding MGIC Investment Corp, Ford Motor Company, and Target.

MGIC Releases Solid May Numbers

MGIC Investment Corp. (NYSE:MTG) is in the spotlight after revealing that its insurance in force for May rose by 5.3% year-over-year to $176.1 billion. Primary delinquent inventory fell by 22.3% year-over-year to 52,990 loans. Although investors were concerned about MGIC Investment Corp. (NYSE:MTG)’s growth prospects after the company raised premiums to earn better returns on capital, the rising insurance in force number soothes some of the concerns. The falling delinquencies should also help profits. Doug Silverman and Alexander Klabin‘s Senator Investment Group was one of the top shareholders of the stock at the end of March.

Ford Motor China Sales Decline

Ford Motor Company (NYSE:F)‘s China sales retreated by 2.5% year-over-year to 88,248 units for the month of May, in sharp contrast to competitor General Motors Company (NYSE:GM), which had sales in the region rise by 16.9% for the month. Changan Ford Automobile sales numbered 67,055 units, while Jiangling Motors Corporation’s sales amounted to 19,692 units. Imported vehicles constituted the remaining 1,501 units sold for the month. Ford’s performance in China remains robust despite the down month, with year-to-date sales numbering 479,542 units, a 5% year-over-year rise. Ford Motor Company (NYSE:F) was held by 33 funds that we track as of the most recent 13F reporting period.

Target Rises on Dividend Bump

Target Corporation (NYSE:TGT) is almost 1% higher in morning trading after its board raised the company’s quarterly dividend payment by 7.1% to $0.60 per share. At current share prices, the dividend’s annual yield stands at 3.52%. Target Corporation (NYSE:TGT) shareholders could use the dividend raise; shares of the retailer are down by 4.5% year-to-date and trade at a forward P/E of 12.08. Cliff Asness‘ AQR Capital Management owned around 2 million Target shares at the end of March.

Disclosure: None