Here Is Why Investors Are Talking Netflix, Lloyds Banking Group and Others Today

US stocks are falling again today as a sign that investors are not done with their post-Brexit trading just yet. Positive economic data released earlier failed to contain the slide. A couple of financial stocks hold the headlines today on the back of M&A activity and Brexit uncertainty, while a jewelry stock is soaring following a recent financial report. We’ll also take a look at an online streaming service that just got downgraded.

While there are many metrics that investors can assess in the investment process, hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).

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New Bid For National Interstate Corporation

American Financial Group Inc (NYSE:AFG) has boosted its bid for National Interstate Corporation (NASDAQ:NATL) today, announcing it is ready now to pay $32 per share, up from $30 a share initially offered in March. The new bid price would value National Interstate Corporation (NASDAQ:NATL) at $637.8 million. American Financial Group Inc (NYSE:AFG) said the bid was “best and final offer” and has stated its belief that the offer will be accepted. The stock is slightly lower this morning, while shares of National Interstate jumped nearly 4% to $31.15 apiece following the announcement.

On March 7, American Financial Group Inc (NYSE:AFG) announced its intention to acquire National Interstate Corporation (NASDAQ:NATL), offering shareholders a premium of roughly 33% over the price of shares at that moment. Although one would expect the stock to drop because of arbitrageurs trying to scrap some profits, American Financial Group’s stock is up by 5.6% since the announcement. At the end of the first quarter, only 16 of the funds tracked by Insider Monkey were invested in American Financial Group, unchanged from the previous quarter. National Interstate Corporation, on the other hand, saw increased interest as the number of long hedge fund positions rose to six at the end of March, from four registered a quarter before.

Growth Slowdown

Netflix, Inc. (NASDAQ:NFLX) shares are down by 2.6% this morning after the stock was downgraded by analysts at Jefferies to “Underperform” from the previous “Hold” rating. The firm has also cut its price target to $80 from $120, stating that, according to their research, Netflix, Inc. (NASDAQ:NFLX) subscriber growth curve is poised to flatten out more than investors expect. Jefferies also points to increased competition in the industry, as rivals Hulu and Amazon.com, Inc.(NASDAQ:AMZN) have stepped up their effort to gain market share. The firm also said it expects Netflix’s overseas growth to remain strong, but it will be challenging to maintain due to limited local content, language barriers and underdeveloped infrastructure in some parts of the world. According to our data, 64 of the funds we follow had Netflix, Inc. (NASDAQ:NFLX) in their equity portfolios at the end of the first quarter, amassing roughly 15% of the company’s common stock.

Turnaround

Birks Group Inc (NYSEMKT:BGI) shares are rallying after the company swung to a profit in the fiscal 2016. An operator of jewelry stores in US and Canada, Birks Group Inc (NYSEMKT:BGI) reported $285 million in net sales, down by 5% compared to fiscal 2015, and a profit of $5.4 million or $0.03 per share, up from a loss of $0.48 per share reported for the previous year. The company registered a 3% growth in comparable store sales, while selling, general and administrative costs fell to 31.9% of net sales, from 34.4% of net sales registered in fiscal 2015. “Following a year of restructuring our Company’s operations, the main factors that contributed to our success in fiscal 2016 included our continued dedication to enhancing customer experiences via our new store designs, the successful launch of our new collections and our creative marketing campaigns,” commented Jean-Christophe Bédos, President and CEO of the company. None of the funds in our database had Birks Group Inc (NYSEMKT:BGI) in their portfolios at the end of the first quarter.

More Misery For British Banks

The stock of British banking giant Lloyds Banking Group PLC (ADR) (NYSE:LYG) gets hammered again amid uncertainty regarding the UK’s future in the European Union. British bank stocks were severely punished following the release of UK’s EU referendum results, with Lloyds Banking Group PLC (ADR) (NYSE:LYG) having fallen by 37% in seven trading days. With UK commercial property prices facing increased downside risk, Lloyds stock faces increased pressure as the bank’s commercial property loan portfolio amounts to approximately 18.1 billion pounds ($23.3 billion), which represents roughly 46% of its tangible net asset value. This week, three asset managers have frozen withdrawals from real-estate funds, adding more gas to the fire. With the Pound also dropping to new historic lows, foreign investors will see the value of their holdings decrease further. Only seven of the funds followed by Insider Monkey were holding Lloyds Banking Group PLC (ADR) (NYSE:LYG) shares at the end of March, up from five registered a quarter earlier.

Disclosure: none.