Investors Are Excited About These 5 Stocks As The Trading Week Kicks Off

The Republican Presidential ticket is now set after Donald Trump formally announced that Indiana Governor Mike Pence will be his VP running mate. Gun rights activists are no doubt happy, as Pence has an ‘A’ rating from the National Rifle Association. The governor has also previously worked to roll back some gun control laws.

Amidst the political backdrop, five stocks, including three gun-related ones, are trending this morning. In this article, we’ll take a closer look at the news driving interest in the shares of Wal-Mart Stores, Inc. (NYSE:WMT), Coach Inc (NYSE:COH), Smith & Wesson Holding Corp (NASDAQ:SWHC), Sturm, Ruger & Company (NYSE:RGR), and TASER International, Inc. (NASDAQ:TASR) this pre-market, and see how the elite funds tracked by Insider Monkey are positioned in each stock.

At Insider Monkey, we track around 765 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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Wal-Mart Labor Unions Collaborate Across Pacific

Wal-Mart Stores, Inc. (NYSE:WMT) is in the spotlight after Reuters published an exclusive article stating that OUR Wal-Mart, a U.S. labor union with the support of around 100,000 Wal-Mart workers, collaborated with the Wal-Mart Chinese Workers Association, a Chinese Wal-Mart labor group, to talk strategy about how to increase wages and flexibility. The collaboration is one of the first of its kind. Although increased collaboration between labor groups could theoretically lead to higher wages and potentially lower Wal-Mart’s profits, analysts don’t expect the cross-ocean collaboration to yield meaningful benefits for labor workers any time soon, given that the two unions don’t have much leverage at the moment. Warren Buffett‘s Berkshire Hathaway owned owned more than 55 million shares of Wal-Mart Stores, Inc. (NYSE:WMT) at the end of March.

Analysts Upgrade Coach 

Traders are watching Coach Inc (NYSE:COH) today after analysts at Baird upgraded the stock to ‘Outperform’ from ‘Neutral’ and raised their price target on it to $50 per share from $45 per share. The analysts see demand improving for Coach products as the U.S economy remains strong. Coach shares have rallied by 31% year-to-date and pay an attractive 3.19% annual dividend yield at current prices. 37 funds in our database owned shares of Coach Inc (NYSE:COH) as of the most recent 13F reporting period, unchanged from the end of the previous quarter. Shares are up by 1.6% in pre-market trading.

On the next page we examine why Smith & Wesson, Sturm Ruger & Company, and TASER International are being watched closely this morning.

Another Shooting May Mean More Volatility for Firearm-Related Plays

Gun stocks Smith & Wesson Holding Corp (NASDAQ:SWHC) and Sturm, Ruger & Company (NYSE:RGR), along with taser manufacturer TASER International, Inc. (NASDAQ:TASR) are in the spotlight today after a gunman killed three police officers in Baton Rouge on Sunday. The gunman, who was a former marine, had anti-police views and may have been further angered after Alton Sterling was killed by Baton Rouge officers earlier in the month while allegedly reaching for a firearm in his pocket, which was later retrieved. The renewed focus on the shooting of black men by police officers could prompt more interest in Taser, a company that makes non-lethal weapons, and the killings of the three police officers over the weekend could prompt more calls for greater gun control, which would increase the immediate demand for guns.

Although gun stocks and Taser typically rally after mass shootings, the market could be exhausting itself on the news, given that several other mass shootings have occurred recently. Shares of all three companies are up modestly in pre-market trading. Of the 766 elite funds that we track, 24 funds owned shares of Smith & Wesson Holding Corp (NASDAQ:SWHC) on March 31, 17 top funds had long positions in Sturm, Ruger & Company (NYSE:RGR), and 11 funds had shares of TASER International, Inc. (NASDAQ:TASR) in their equity portfolios.

Disclosure: None