Here’s Why Tempur Sealy International, Nike, Facebook, and Two Other Stocks Are Trending Today

With the two big catalysts this month, the FOMC decision on the 21 and the OPEC decision on the 27, in the rear-view mirror, volatility has died down, with the VIX fear index closing at just 13.1 yesterday.

Among the stocks that investors are buzzing about today are two companies that have just reported earnings or updated their guidance and three tech giants. Let’s take a closer look at the latest news surrounding Tempur Sealy International Inc (NYSE:TPX), Nike Inc (NYSE:NKE), Facebook Inc (NASDAQ:FB), Yahoo! Inc. (NASDAQ:YHOO), and Verizon Communications Inc. (NYSE:VZ) and see what the smart money investors from our database think about them.

At Insider Monkey, we track around 740 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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Tempur Sealy International Inc (NYSE:TPX) shares have plunged after the company issued a business update in regards to its financial guidance for full year 2016. For the year, Tempur Sealy expects net sales to be down 1 to 3 percent as compared to 2015 and for adjusted EBITDA to be in the range between $500-$525 million. The company also said:

“The net impact of the revenue shortfall and our continued margin expansion is that we felt it was appropriate to lower the midpoint of our adjusted EBITDA guidance by 5%. The midpoint of this updated guidance implies an increase in adjusted EBITDA of approximately 12% and approximately 20% growth in adjusted earnings per share compared to 2015.”

Of the 749 top funds that we track, 37 held $1.16 billion worth of Tempur Sealy International Inc (NYSE:TPX)’s stock, which accounted for 34.40% of the float on June 30.

Nike Inc (NYSE:NKE) is in the spotlight after the company reported fiscal first quarter earnings of $0.73 per share, beating the estimates by $0.17 per share. Revenue was $9.06 billion, up by 7.7% year-over-year, and $190 million ahead of estimates. Gross margin inched lower by 200 basis points to 45.5% as higher average selling prices were more than offset by the strong dollar, the impact of exiting the Gulf equipment business, and several other temporary factors. During the quarter, Nike bought back 19 million shares for a total value of around $1.1 billion. Stephen Mandel’s Lone Pine Capital upped its stake by 53% in the second quarter in Nike Inc (NYSE:NKE) to 18.3 million shares at the end of June.

On the next page, we find out why traders are talking about Facebook Inc, Yahoo! Inc, and Verizon Communications Inc.

Facebook Inc (NASDAQ:FB) is trending after The Information reported that the tech giant is close to launching Facebook at Work, a business-first social network that is designed to compete against Yammer and Slack. In order to monetize the service, Facebook is planning to charge corporations a variable fee based on the number of employees who use the software monthly. That’s a little different from the previous plan of offering a freemium service. Given how lucrative the enterprise market is, many investors are hoping for the best for Zuckerberg and Co in their latest endeavor. Meanwhile Facebook exec Carolyn Everson said that ad buyers didn’t use Facebook’s previously inflated video metrics, saying ‘Universally, I’ve heard that no one has actually utilized that metric. It did not impact ROI and did not impact billing’. Facebook was the most widely held tech stock among the funds that we track, with 148 out of 749 top funds reporting long positions in Facebook Inc (NASDAQ:FB) at the end of the second quarter.

Yahoo! Inc. (NASDAQ:YHOO) is in more hot water, this time from various senators on the Hill, who have written a letter calling for the company to disclose how the hack, which revealed information of over 500 million users, ‘went unnoticed for two years’. Some Senators have taken a step further and called for the SEC to investigate the hack, asking whether Yahoo management fulfilled their disclosure obligations to shareholders. Meanwhile, Tim Armstrong, CEO of AOL, which is owned by Verizon Communications Inc. (NYSE:VZ), the company that had agreed to buy Yahoo’s core internet properties said:

“On the deal side, from a value standpoint for Verizon shareholders and everybody else involved, we just have to make sure we understand what the data issues relate to and what we were signing up to buy.”

Basically it seems that the situation is still fluid. According to our data, 81 funds were bullish on Yahoo! Inc. (NASDAQ:YHOO)  and 52 investors held shares of Verizon Communications Inc. (NYSE:VZ) at the end of June.

Disclosure: none