Here’s Why GM, Ford, Xerox and Two Semiconductor Stocks Are in Spotlight Today

The US stock market has had a solid start of 2017 trading, with Dow Jones Industrial Average, S&P 500, and NASDAQ well in the green. The indexes were pushed higher amid an increase in dollar, higher oil and metal prices, as well as positive data from abroad. European stocks also went up today on data that long-term inflation expectations in the euro zone have approached the ECB’s target of around 2%. In April, the central bank plans to start reducing its stimulus program to €60 billion a month until Dec 2017.

Meanwhile, several stocks are in the spotlight today in connection with some recent developments. Among them are two automotive companies: General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F), as well as two semiconductor manufacturers: Advanced Micro Devices, Inc. (NASDAQ:AMD) and Intel Corporation (NASDAQ:INTC). Moreover, Xerox Corp (NYSE:XRX) is trading higher following the completion of the Conduent spin-off. With this in mind, let’s take a closer look at the latest events surrounding these companies and assess the hedge fund sentiment towards each of them to get a better perspective of their long-term performance.

We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.

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General Motors Company (NYSE:GM) is in the spotlight after it was attacked by president-elect Donald Trump for producing a model of its Chevrolet Cruze in Mexico and sending it to dealers in the US. “Make in U.S.A. or pay a big border tax” Trump said on Twitter. Unsurprisingly, Trump didn’t have the accurate information, as the company has issued a statement in which it said that it manufactures the Cruze sedan in Ohio and only the hatchback model for global markets is manufactured in Mexico. In this way, out of 190,000 Cruzes sold in the U.S. last year, around 2.4% were Mexico-made hatchbacks. General Motors Company (NYSE:GM)’s stock declined in pre-market on Trump’s comments, but is trading higher in intraday trading.

Ford Motor Company (NYSE:F) is another car maker that Trump bashed on during his election campaign over plans to relocate its Kentucky plant to Mexico. However, earlier today, the company said it would cancel the construction of a $1.6 billion plant in Mexico and will invest $700 million in its plant in Michigan. The move will allow to add 700 jobs for the production of high-tech electrified and autonomous vehicles, and the Mustang and Lincoln Continental. Trump also took it to Twitter to brag about his “latest success”. However, Ford still has a factory in Mexico and will use it to build its next generation Focus “to improve company profitability.” Ford Motor Company (NYSE:F) also announced plans to start the production of seven electrified vehicles in the next five years, including F-150 Hybrid and Mustang Hybrid. Amid the news, Ford’s stock is trading over 3% in the green today.

Now, let’s see what the smart money investors tracked by us think about each stock. Based on the data from the last round of 13F filings, General Motors Company (NYSE:GM) is almost twice as popular as Ford. At the end of September, 62 funds held shares of General Motors, having amassed 7.50% of the company’s float, versus 32 funds that held 1.40% of the stock in Ford Motor Company (NYSE:F)’s case.

Intel Corporation (NASDAQ:INTC)‘s stock has inched up today amid reports that the company plans to acquire a 15% stake in digital mapping firm HERE, according to a person familiar with the matter cited by Reuters. Earlier today, a filing to the German cartel office disclosed that Intel Corporation (NASDAQ:INTC) had asked for approval to take a stake in HERE. The mapping company is controlled by Daimler, Volkswagen and BMW, who bought it from Nokia for $2.60 billion in 2015.

Advanced Micro Devices, Inc. (NASDAQ:AMD) was trading higher earlier today, but has given up the gains following the announcement that the semiconductor company is introducing a new display technology. The technology, Radeon FreeSync 2, will allow monitors to show the exact intended image pixels that an application requires, which should result in better image quality for gamers. In other news, yesterday, The Wall Street Journal reported that President Barack Obama’s chief science adviser is finalizing a report on Chinese investment in the US semiconductor companies, which could lead to restrictions on joint-ventures with Chinese firms and export controls. The report will provide guidance to the Committee on Foreign Investment in the U.S. on China’s efforts to dominate the semiconductor industry.

Both Intel Corporation (NASDAQ:INTC) and Advanced Micro Devices, Inc. (NASDAQ:AMD) registered a surge in popularity among investors tracked by us during the third quarter. In this way, at the end of September, 68 funds held shares of Intel, up by 11 over the quarter, while the number of funds long Advanced Micro Devices, Inc. (NASDAQ:AMD) surged by 22 over the quarter to 47.

Finally, Xerox Corp (NYSE:XRX)‘s stock is trading 15% higher after the company completed the spin-off of Conduent Inc (NYSE:CNDT). Following the separation, Xerox has received a cash transfer of $1.8 billion, which it plans to use to retire some of its debt, while shareholders of Xerox Corp (NYSE:XRX) have received one share of Conduent for every five shares of Xerox. In addition, earliert today, JPMorgan has upgraded Xerox’s stock to ‘Overweight’ to ‘Neutral’, saying that the spin-off represents the beginning of a turnaround process for the company. Among the funds we track, 32 investors amassed around 13.90% of Xerox Corp (NYSE:XRX)’s outstanding stock heading into the fourth quarter. Billionaire Carl Icahn‘s Icahn Capital holds the largest stake, which contains over 99 million shares, or around 9.7% of the outstanding stock, according to its latest 13F filing.

Disclosure: none