Here’s Why These Five Stocks Are in the Spotlight Today

Despite there being just a couple more days to go until November 8, the market is surprisingly calm as all three major indexes are moderately in the green.

In this article, we will examine the reasons why PTC Therapeutics, Inc. (NASDAQ:PTCT), Centurylink Inc (NYSE:CTL), Michaels Companies Inc (NASDAQ:MIK), Tesla Motors Inc (NASDAQ:TSLA), and SolarCity Corp (NASDAQ:SCTY) are each in the spotlight and we will assess the hedge fund sentiment towards these stocks.

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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PTC Therapeutics, Inc. (NASDAQ:PTCT) has bounced back by 17% after yesterday’s over 30% plunge. PTCT shares fell yesterday due to the company including the following in its earnings report:

“While we have provided information in response to the CHMP’s requests and expect to continue to engage in further interactions, recent dialogue has introduced a higher degree of uncertainty as to the outcome.”

PTC could really use the advisory committee’s approval if Translarna is to remain commercially available in the EU. A thumbs down from the CHMP would not be helpful for Translarna’s availability. With the rally today, it seems that some traders think that the company could still potentially satisfy the CHMP and keep Translarna on the market in the EU. Of the 749 funds we track, 13 funds owned $22.28 million worth of PTC Therapeutics, Inc. (NASDAQ:PTCT)’s stock, which accounted for 9.20% of the float on June 30, versus 12 funds and $40.31 million, respectively, on March 31.

Centurylink Inc (NYSE:CTL) shares have inched up 1% after the company announced that it had reached an agreement to sell datacenters and colocation business to a consortium led by Medina Capital and BC Partners. In exchange, CenturyLink will receive $2.15 billion in cash subject to various adjustments, and a minority stake to be valued at $150 million in the consortium’s newly formed global secure infrastructure company. Management plans to use the proceeds to fund its purchase of Level 3 Communications. A total of 28 funds from our database were long Centurylink Inc (NYSE:CTL) as of the most recent 13F reporting period, down by three funds from the previous quarter.

On the next page, we examine Michaels Companies, Tesla Motors, and SolarCity Corp.Traders are keeping an eye out on Michaels Companies Inc (NASDAQ:MIK) after Bank of America analyst Denise Chai downgraded the stock to ‘Neutral’ from ‘Buy’ and trimmed her price target to $25 from $33 per share. Chai downgraded the stock due to her research that showed peers becoming increasingly aggressive with promotions and new store openings. Due to that research, Chai doesn’t think Michaels will deliver great comp growth. There are apparently some traders out there that don’t share Chai’s views, as the stock is 1% in the green. A total of 22 funds tracked by us had a bullish position in Michaels Companies Inc (NASDAQ:MIK) at the end of the second quarter, down by nine funds from the previous quarter.

SolarCity Corp (NASDAQ:SCTY) and Tesla Motors Inc (NASDAQ:TSLA) are trending after Tesla reported in its blog that Institutional Shareholder Services (ISS) recommends shareholders vote in favor of the merger between the two companies. Given that the early voting on the merger is rather positive and now ISS recommends the deal, many traders are pricing in a thumbs up vote at the November 17 meeting, shares of SolarCity are up 9.22% on the day to trade around $20.26 per share. If Tesla stock remains around $190.69 per share and the merger is approved, SolarCity would theoretically be worth around $21 per share.  Of the 749 funds that we track, 36 funds were long Tesla Motors Inc (NASDAQ:TSLA) and 26 funds held shares of SolarCity Corp (NASDAQ:SCTY).

Disclosure: None