Here’s Why Global Blood, Deutsche Bank, PayPal, and Two Other Stocks Are Trending Today

Amid another spate of earnings releases all three main stock indexes are trading lower today. The Dow Jones is down by 0.21%, the S&P 500 is 0.30% in the red, and the NASDAQ index is close has lost around 0.35%.

In this article, we examine why five stocks, Alibaba Group Holding Ltd (NYSE:BABA), Paypal Holdings Inc (NASDAQ:PYPL), Global Blood Therapeutics Inc (NASDAQ:GBT), Chesapeake Energy Corporation (NYSE:CHK), and Deutsche Bank AG (USA) (NYSE:DB) are on investors’ radars on Tuesday. In addition, we are going to assess the hedge fund sentiment towards the companies in question.

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).

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Traders are watching Alibaba Group Holding Ltd (NYSE:BABA) after Goldman Sachs analyst Piyush Mubayi hiked his price target on the e-commerce giant’s stock to $130 from $120 per share and maintained the stock in the Goldman’s ‘Conviction Buy’ list. Mubayi likes Alibaba’s organic growth outlook and thinks the company’s margin outlook for its core business is solid. Alibaba shares are up 28% year-to-date. Of the 749 funds we track, 69 funds owned $5.52 billion worth of Alibaba Group Holding Ltd (NYSE:BABA)’s stock, which accounted for 2.80% of the float on June 30, versus 67 funds and $5.14 billion, respectively, on March 31.

Paypal Holdings Inc (NASDAQ:PYPL) is in the spotlight after the payments giant announced that it has extended its relationship with Facebook Inc (NASDAQ:FB). In particular, PayPal will be a payment option across more of Facebook’s commerce interfaces, including Messenger commerce. Given that Facebook has over 1.0 billion active users across its platforms, the increased integration with the giant is certainly good news for PayPal in the near term. A total of 84 funds from our database owned shares of Paypal Holdings Inc (NASDAQ:PYPL) at the end of the second quarter, down by three funds from the previous quarter.

On the next page, we find out why the spotlight is shining on Global Blood, Chesapeake Energy Corporation, and Deutsche Bank AG (USA).

Global Blood Therapeutics Inc (NASDAQ:GBT) has spiked 21% after the company announced that it has reached an agreement with the FDA regarding the design of its pivotal trial for GBT440 in adolescents and adults with sickle cell disease. Due to the agreement, the company plans to start a phase 3 clinical trial, HOPE study, in December. The number of funds tracked by us with holdings in Global Blood Therapeutics Inc (NASDAQ:GBT) rose by five quarter-over-quarter to 20 at the end of June.

Chesapeake Energy Corporation (NYSE:CHK) is trending after RBC Capital analys Scott Hanold upgraded the stock to ‘Sector Perform’ from ‘Underperform’. Hanold also raised his price target to $8 per share from $7, citing the company’s lower costs, balance sheet enhancements, and its more robust long term margin outlook. Although some bearish traders may still disagree, Hanold thinks management’s debt reduction goals are also ‘achievable’. At the end of June, 31 investors followed by Insider Monkey were long Chesapeake Energy Corporation (NYSE:CHK), unchanged over the quarter.

Deutsche Bank AG (USA) (NYSE:DB) shares are 1.2% in the red after Sky News reported that the Department of Justice has hinted in recent days that the imposition of penalties for the mis-selling of mortgage securities could be postponed until closer to when the next U.S. President takes office. According to the article’s sources, “it was now becoming more likely that an announcement from the DoJ could slip beyond next month if it remained intent upon settling with all three banks simultaneously”. If that is the case, the uncertainty of Deutsche Bank might continue for longer than expected. A total of 15 funds from our database were long Deutsche Bank AG (USA) (NYSE:DB) at the end of June.

Disclosure: none