Here’s Why Apple, Home Depot and Three Other Stocks Are Trending Today

The main US indexes opened lower on Tuesday after the Labor Department showed that US consumer prices remained flat in July for the first time in five months. With inflation below the Fed’s goal, the probability of a rate hike in September is lower.

Meanwhile, tech giant Apple Inc. (NASDAQ:AAPL) and four other stocks, Advance Auto Parts, Inc. (NYSE:AAP), Momo Inc (ADR) (NASDAQ:MOMO), Autohome Inc (ADR) (NYSE:ATHM), and Home Depot Inc (NYSE:HD) are in the spotlight today. Let’s take a closer look at the companies in question and see how the investors from our database have been trading these stocks.

At Insider Monkey, we track around 760 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).

Ellica / Shutterstock.com

Berkshire Raises its Stake in Apple 

Apple Inc. (NASDAQ:AAPL) is in the spotlight today after Warren Buffett’s Berkshire Hathaway raised its stake in the tech giant. According to Berkshire’s latest 13F, it added 5.42 million shares to its position during the second quarter, giving it a total stake of 15.23 million shares. Those 15.23 million shares were worth almost $1.5 billion on June 30 and accounted for 1.1% of Berkshire’s equity portfolio. After falling below $100 per share, Apple Inc. (NASDAQ:AAPL) has slowly trended higher on the back of big buybacks, broader market strength, and over investor excitement over the coming iPhone launch in September. Given that Buffett typically doesn’t dabble in tech stocks, the position increase in the second quarter could be due to one of Buffett’s lieutenants.

Bottom Line Miss at Advance Auto Parts

Advance Auto Parts, Inc. (NYSE:AAP) is in the red today after the automotive company reported lackluster second-quarter earnings. Although total driving miles have been strong due to weak oil prices, the company nevertheless reported EPS of $1.90 for its second quarter, missing estimates by $0.23 per share, as the company’s adjusted operating margin rate retreated 120 basis points year-over-year to 10.8%. The company’s revenue did beat estimates by $20 million with sales of $2.26 billion, however, as the company’s comparable-store-sales decline of 4.1% was better than some bearish expectations. At the end of June, Jeff Smith’s Starboard Value held 2.76 million shares of Advance Auto Parts.

On the next page, we find out why Momo Inc (ADR), Autohome Inc (ADR), and Home Depot Inc are trending.

Momo Earnings Ahead of Estimates

Momo Inc (ADR) (NASDAQ:MOMO) shares have spiked higher today after the operator of the Chinese mobile app reported second-quarter earnings of $0.12 per share versus estimates of $0.08 per share. Revenue for the time period was $99.01 million, up by an astounding 222.2% year-over-year, as the mobile app begins monetizing its audience. However, growth might be slower in the future as Momo’s user-base growth has largely leveled off. The number of monthly active users at the end of June 2016 was 74.8 million, slightly lower than the 78.4 million MAU’s at the end of June 2015. Among the investors in our database, GLG Partners initiated a stake containing 216,392 shares of Momo during the second quarter.

Autohome in the Green Due to Earnings Report

Autohome Inc (ADR) (NYSE:ATHM) soundly beat estimates for its second quarter, with EPS of $0.51 on revenue of $207.4 million. Analysts were expecting $0.11 per share and $0.85 million less in revenue. For the time period, the company continued to focus on mobile traffic, with the number of average daily unique visitors in June who accessed the company’s mobile website or mobile applications reaching 8.2 million and 7.1 million, respectively. When combined, that number represents a 55.8% year-over-year jump. For the third quarter, Autohome expects net revenue to rise by 50.2% to 55.1% year-over-year. Billionaire David E. Shaw’s D. E. Shaw & Co. held 347,252 shares of Autohome at the end of June.

Home Depot Earnings In-Line

Given the strength of the housing market, it’s not surprising that Home Depot Inc (NYSE:HD) met both top and bottom line estimates for the second quarter. During the period, Home Depot earned $1.97 per share on revenue of $26.47 billion, as revenue increased by 6.6% year-over-year due to a 4.7% increase in comparable store sales. The outlook is solid, with management expecting full-year sales growth of around 6.3% and diluted EPS of $6.31 at mid-point. Billionaire Ken Fisher’s Fisher Asset Management reported ownership of 8.44 million shares of Home Depot in its latest 13F filing.

Disclosure: none