Here’s Why Noble Corporation, Electronic Arts, Twitter, and Two Other Stocks Are in Spotlight

Wall Street is in the green today after the government reported that the U.S. economy grew a sizzling 2.9% in the third quarter, or 0.4% better than analyst estimates.

In this article, we will examine why Noble Corporation Ordinary Shares (UK) (NYSE:NE), Electronic Arts Inc. (NASDAQ:EA), Twitter Inc (NYSE:TWTR), Honeywell International Inc. (NYSE:HON), and Mead Johnson Nutrition CO (NYSE:MJN) are in the spotlight today and we will assess the hedge fund sentiment towards each stock.

We believe that imitating hedge funds and other large institutional investors can be helpful in identifying stocks capable of outperforming the broader market. Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).

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Noble Corporation Ordinary Shares (UK) (NYSE:NE) shares are down by 2% after the company announced the elimination of its $0.02 per share quarterly dividend, effective immediately. Due to the challenging fundamentals in the offshore drilling industry that have led to lower fleet utilization, Noble’s board of directors chose to focus on liquidity preservation rather than pay the annual dividend cost of around $20 million. Whether the dividend suspension is a good long term move depends on how soon the offshore drilling market recovers. Although many expect the sector to bottom next year, it is unclear how robust a recovery will be given the current inventory surpluses and the sub-$60 Brent prices. Of the 749 funds we track, 33 funds owned $287.35 million worth of Noble Corporation Ordinary Shares (UK) (NYSE:NE)’s stock, which accounted for 14.30% of the float on June 30, up from 29 funds and $181.02 million, respectively, on March 31.

Electronic Arts Inc. (NASDAQ:EA) is 3.4% in the red after Cowen analyst Doug Creutz downgraded the videogame maker’s stock to ‘Market Perform’ from ‘Outperform’ and trimmed his price target to $82 per share from $96. Creutz cut his rating specifically because he estimates Titanfall 2 sales will be disappointing, as he estimates unit sales for the game to come in around 6.0 million, versus the previous estimate of 9.0 million. Although he is bearish on Titanfall 2, Creutz does not expect management’s guidance to miss due to stronger-than-anticipated Battlefield 1 sales. The number of elite funds with holdings in Electronic Arts Inc. (NASDAQ:EA) rose by two quarter-over-quarter to 58 at the end of June.

On the next page, we examine Twitter, Honeywell International, and Mead Johnson Nutrition CO.