Here’s Why Traders Are Watching Tesla, Kinder Morgan, DragonWave, Select Comfort, and More Today

Crude futures are in the red today as traders take profits from yesterday’s sizable jump. Despite the selling, WTI futures are still above the critical $50 per barrel mark.

Among the stocks in the spotlight today are Tesla Motors Inc (NASDAQ:TSLA), Kinder Morgan Inc (NYSE:KMI), DragonWave, Inc.(USA) (NASDAQ:DRWI), DXP Enterprises Inc (NASDAQ:DXPE), and Select Comfort Corp. (NASDAQ:SCSS). Let’s take a closer look at the various reasons traders are watching each equity today and analyze relevant smart money sentiment towards each of the stocks.

Our research determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).

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Tesla Motors Inc (NASDAQ:TSLA) is in the spotlight after the company announced that all Tesla cars being produced now have full self-driving hardware. That includes the Model 3, which will be Tesla’s first mass-market car, and vital to the company’s overall success. According to Tesla, all vehicles will have eight surround cameras, twelve updated ultrasonic sensors, forward-facing radar, and a powerful no-board computer to process all of the hardware information. Despite the news, Tesla shares are 2.35% in the red this morning, as the market was apparently expecting a different kind of product announcement from Elon Musk and Co., who had hyped up (and even delayed) the announcement in prior days. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 36 owned $1.13 billion worth of Tesla Motors Inc (NASDAQ:TSLA) positions as of the end of June, compared to 39 funds with $1.08 billion in holdings on March 31.

Kinder Morgan Inc (NYSE:KMI) is in the green today despite reporting a soft third quarter. For the three months, Kinder lost $0.10 per share on revenue of $3.33 billion, missing the consensus estimates widely, by $0.26 and $120 million respectively. Sales fell by 10.2% year-over-year as natural gas transport volumes inched lower by 1% year-over-year and combined gross oil production volumes dropped by 6%. Meanwhile, DCF for the period came in at $0.48 per share, or almost four-times higher than the company’s $0.125 per share quarterly dividend. Despite the soft headline quarterly numbers, traders took solace in the fact that the company is ahead of its plan for 2016 year-end leverage of 5.5-times (by around 0.2-times) and that its management is confident that the company can reach the targeted leverage level of around 5-times debt-to-adjusted EBITDA. The debt reduction reduces Kinder’s long-term risk, and is likely one reason why Kinder is higher this morning. Warren Buffett‘s Berkshire Hathaway owned 26.53 million shares in Kinder Morgan Inc (NYSE:KMI) at the end of June.

On the next page we’ll examine the trending news concerning DragonWave, DXP Enterprises, and Select Comfort.

Nano-cap DragonWave, Inc.(USA) (NASDAQ:DRWI)‘s shares have surged sharply after the company announced that it has been selected to provide microwave backhaul equipment to Sprint Corp (NYSE:S) for the telecom’s network densification and optimization strategy. Exact financial details of the deal were not provided in the initial press release. None of the funds that we track owned shares of DragonWave, Inc.(USA) (NASDAQ:DRWI) at the end of the second quarter.

DXP Enterprises Inc (NASDAQ:DXPE) shares have fallen by almost 16% this morning after the company released soft preliminary third quarter results. For the period, DXP anticipates sales to come in between $228 million and $231 million, or a decrease of 23.8%-to-24.8% year-over-year. Net income is anticipated to be between a loss of $500,000 and a gain of $500,000. DXP’s sales were soft due to disappointing July sales, which were due to slow bookings and shipments around the fourth of July holiday. Six funds in our system were long DXP Enterprises Inc (NASDAQ:DXPE) at the end of June.

Select Comfort Corp. (NASDAQ:SCSS) is off by 12% today after it reported third quarter earnings of $0.56 per share on sales of $368 million, missing the consensus estimates by $0.01 per share and $23.02 million respectively. Sales fell by 1.6% year-over-year, as the 7 percentage points of growth from stores opened in the last 12 months failed to offset the 8% comparable-store sales decline. Guidance was also disappointing, Select Comfort’s management lowered its EPS outlook for the full year to $1.15-to-$1.25 from the previous range of $1.25-to-$1.45. The number of funds that we track with holdings in Select Comfort Corp. (NASDAQ:SCSS) fell by one during the second quarter to 12 at the end of June.

Disclosure: None