Here’s Why These Stocks Are Trending Today

It’s been a good day to be a bull on Wall Street as all three indexes have opened well in the green and stayed that way so far. Although there is still some uncertainty as to how the ‘Brexit’ voting might turn out, it seems the markets aren’t concerned about the outcome just yet.

Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 760 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).

Herman Miller Reports Solid Earnings

Herman Miller, Inc. (NASDAQ:MLHR) earned $0.56 per share on revenue of $582.6 million in its fiscal fourth quarter, beating the consensus estimates by $0.04 per share and $14.05 million, respectively. Guidance is strong, with management expecting first quarter EPS of $0.60 to $0.64 on revenue of $600 to $620 million, versus analysts’ estimates of $0.60 per share and $589.3 million, respectively. Due to the solid results, the company has increased its quarterly dividend to $0.17 per share from the previous $0.1475 per share. A total of 17 funds from our database owned shares of Herman Miller, Inc. (NASDAQ:MLHR) at the end of the first quarter, down by two funds from the previous quarter.

Bank of America Rises in Anticipation of ‘Bremain’, Settlement

Bank of America Corp (NYSE:BAC) shares have surged by 2% following a Wall Street Journal article and on the back of hopes that Britain will remain inside the EU. According to the article, Bank of America is close to settling an SEC case over alleged violations over not having enough proper safeguards over client accounts. The bank is purportedly considering paying $400 to $450 million to put the case to rest. A settlement could occur as early as Friday. Of the 766 elite funds we track, 110 funds owned $5.52 billion worth of Bank of America Corp (NYSE:BAC)’s stock, which accounted for 4.00% of the float on March 31, versus 113 funds and $6.8 billion, respectively, a quarter earlier.

On the next page, we examine Tesla Motors, SolarCity Corp, and Canadian Pacific Railway.