Here’s Why Goldcorp, Southwest Airlines and Three Oil Stocks Are in Spotlight Today

Despite news that Venezuela has held talks with Iran over oil price stability, crude futures are in the red on Monday as traders take profits on the recent run-up.

In this article, we analyze why traders are talking about some oil-related names such as Exxon Mobil Corporation (NYSE:XOM), BP plc (ADR) (NYSE:BP), and ConocoPhillips (NYSE:COP) and two other stocks, Goldcorp Inc. (USA) (NYSE:GG), and Southwest Airlines Co (NYSE:LUV). We will also use data from the last round of 13F filings to see what smart money investors think about the companies in question.

At Insider Monkey, we track around 750 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).

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Barron’s: Goldcorp has 25% upside 

Goldcorp Inc. (USA) (NYSE:GG) is in the spotlight today after financial magazine Barron’s published a bullish column on the gold producer. In the article, author Robin Blumenthal noted that Goldcorp Inc. (USA) (NYSE:GG) shares haven’t done as well as its peers. While shares of Goldcorp’s peers have more than doubled in 2016, shares of Goldcorp have rallied only by 39% year-to-date. The author attributes the under-performance to Goldcorp’s big capex program and the company’s recent history of over-promising and under-delivering. Fortunately for bulls, Blumenthal thinks Goldcorp’s period of under-performance will end as the company tightens its spending and new management begins executing. If gold prices continue rising, Goldcorp could have an upside greater than the current 25%. First Eagle Investment Management owned 39.46 million shares at the end of June.

Southwest Airlines Has a Close Call

Traders are talking about Southwest Airlines Co (NYSE:LUV) on Monday after one of the company’s planes’ engines suffered a major malfunction en-route that caused the plane to be diverted to Northern Florida rather than to its intended destination of Orlando. Fortunately, the plane, a Boeing 737-700, landed safety, and none of the 99 passengers and five crew members were hurt. Both Southwest and Boeing Co (NYSE:BA) are working hard to fix the issue. According to our data, the smart money was less bullish on Southwest in the second quarter. Of the around 750 funds Insider Monkey tracks, 45 investors had a bullish position in Southwest Airlines Co (NYSE:LUV) at the end of June, down by 13 funds from the previous quarter.

On the next page, we take a closer look at Exxon Mobil Corporation, BP plc, and ConocoPhillips.

Oil Majors Ask for More State Assistance in Alaskan LNG Project

Exxon Mobil Corporation (NYSE:XOM), BP plc (ADR) (NYSE:BP), and ConocoPhillips (NYSE:COP) are trending after the three companies, who are major partners in the ~$45 billion Alaska LNG project, told the Alaskan government that they will not proceed with the LNG project as currently structured. Due to the LNG glut caused by slowing Asian economies and the low LNG futures prices due to weak crude prices, the project is not economically viable despite the energy companies’ best efforts at cutting costs. The three companies would like the project’s fourth partner, the state of Alaska, to play a bigger role. If the project were fully owned by the state and received tax-exempt status, the Alaskan LNG project would likely receive the green light. Another alternative to push the project past the finish line would be for the state/and the three companies to find big investors who might be willing to accept lower returns on capital such as pension funds. Among the investors in our database, 60 funds owned $3.02 billion worth of Exxon Mobil Corporation (NYSE:XOM)’s stock, 43 funds had a bullish position in ConocoPhillips (NYSE:COP), and 40 funds reported long positions in BP plc (ADR) (NYSE:BP) as of the end of June.

Disclosure: none