FireEye Inc (FEYE), Skechers USA Inc (SKX), and More: Here’s What Analysts Had To Say About These Trending Stocks

While no investor has a monopoly on market wisdom, analysts at major investment banks are more skilled than most in that aspect. Given that analysts have more access to management and in most instances years of experience in the sector, their commentary can be very insightful and valuable.

Due to those conditions, we have put together a list of stocks that have registered some activity from analysts this week FireEye Inc (NASDAQ:FEYE), Skechers USA Inc (NYSE:SKX), PayPal Holdings Inc (NASDAQ:PYPL), athenahealth, Inc (NASDAQ:ATHN), and Avon Products, Inc. (NYSE:AVP). Let’s dive in and also examine how smart money investors were positioned towards them.

Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 745 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).

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Although the cyber-security firms remain in the spotlight after hackers attacked a major DNS system on Friday, FireEye Inc (NASDAQ:FEYE) isn’t getting any analyst love, as Howard Smith of First Analysis downgraded the stock to ‘Underweight’ from ‘Equal-Weight’ and trimmed his price target to $11 per share from $15 on the last day of the trading week. Smith thinks FireEye’s rapid use of cash will lead to share under-performance going forward and that the current online-security spending environment favors other companies in the sector. Traders, on the other hand, mostly brushed aside Smith’s remarks and bid up FireEye by 2.93% on the same day (as they focused on the DNS attack instead). Of the 749 funds that we track, 27 had a bullish position in FireEye Inc (NASDAQ:FEYE) at the end of June, down by one from the previous quarter.

One analyst on the Street thinks Skechers USA Inc (NYSE:SKX) is oversold after the company reported weaker-than-expected results for its third quarter. Although Skechers’ management gave confusing guidance, John Kernan of Cowen thinks that they are still confident in managing SG&A and inventory. If the management does a good job on those two aspects, Skechers’ results won’t be that bad. Kernan has a ‘Market Perform’ rating on the stock and was somewhat optimistic at the low $20’s level. The stock closed at $18.98 per share on Friday. Ken Heebner‘s Capital Growth Management initiated a new stake of 2.09 million shares in Skechers USA Inc (NYSE:SKX) during the second quarter.

On the next page, we examine what analysts had to say about PayPal Holdings, athenahealth, and Avon Products.
Paypal Holdings Inc (NASDAQ:PYPL) received the thumbs up from Stifel analyst Scott Devitt, who upgraded the stock to ‘Buy’ from ‘Hold’ and set a $49 price target. Devitt liked Paypal’s ‘solid’ third-quarter results and thinks the risk associated with the company’s execution has dropped substantially. Devitt also thinks Paypal can offer ‘stable, consistent, and robust’ growth for the years to come. A total of 84 funds tracked by us owned shares of Paypal Holdings Inc (NASDAQ:PYPL) at the end of June, down by three funds from the previous quarter.

Although he lowered his price target on athenahealth, Inc (NASDAQ:ATHN) to $164 per share from $174 due to the company’s third quarter results, Sean Wieland of Piper Jaffray nevertheless has an ‘Overweight’ rating on the stock. Wieland thinks shares are a buy given the ‘low watermark multiple’. Wieland also noted athenahealth’s valuation is similar to the valuation of Cerner, something that could offer support to shares. The number of funds from our database with holdings in athenahealth, Inc (NASDAQ:ATHN) fell by four quarter-over-quarter to 20 at the end of June.

Wendy Nicholson of Citi gave Avon Products, Inc. (NYSE:AVP) her nod of approval on Friday after she raised her price target to $8 per share from $6 and reiterated her ‘Buy’ recommendation. Nicholson thinks shares are more ‘investable’ given that the company has refinanced some of its debt, which has reduced bankruptcy concerns. Nicholson also considers the Cerberus investment has increased shareholder confidence in the management team. At the end of June, 25 funds tracked by Insider Monkey owned $215.34 million worth of Avon Products, Inc. (NYSE:AVP)’s stock, which accounted for 13.00% of the float on June 30, versus 28 and $256.7 million, respectively, on March 31.

Disclosure: None