Markets inched up on Monday morning as investors anxiously await Federal Reserve Chair Janet Yellen’s speech in the afternoon at World Affairs Council in Philadelphia. Yellen had hinted a rate hike a few weeks ago, but a bad job report on Friday has weakened the chances of the FOMC raising the rates this month. Some of the stocks which investors are watching closely today include Devon Energy Corp (NYSE:DVN), Monsanto Company (NYSE:MON), Cabelas Inc (NYSE:CAB), Starwood Hotels & Resorts Worldwide Inc (NYSE:HOT), and Alibaba Group Holding Ltd (NYSE:BABA). Let’s see why these stocks are on the radar and analyze hedge funds sentiment towards each of them.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see more details here).
Devon Energy Selling Assets
Devon Energy Corp (NYSE:DVN) announced on Monday that it would sell several of its production assets in Texas for nearly $1 billion, under its plan to improve its financial position. These assets include fields in Texas and Oklahoma and a royalty interest in the northern Midland Basin. The Oklahoma-based oil company, which has borne the brunt of declining oil prices, also said that it would announce the sale of its 50% interest in Canada’s Access Pipeline, which supplies oil across northeastern Alberta. Devon Energy Corp (NYSE:DVN)’s stock has gained over 4% since the opening bell. A total of 58 funds from our database were long Devon Energy Corp (NYSE:DVN) at the end of the first quarter of 2016, having amassed approximately $1.4 billion worth of stock. Among them, First Eagle Investment Management owns more than 9.6 million shares of the company.
Christopher Penler / Shutterstock.com
Uncertainty Around Monsanto’s Acquisition
Monsanto Company (NYSE:MON)’s stock has inched down by 1.53% so far on Monday following a report from Barron’s, according to which the acquisition of the company by Germany’s Bayer may not happen since Bayer might not be able come up with enough seed money to bid more than the already offered $62 billion for the Missouri-based Agrochemical Company. The source said that the growth prospects of Monsanto are also eroding. Its earning consensus for the next fiscal year has declined to $5.48 per share from $6.33. Out of some 760 elite funds we track, 51 funds owned $2.45 billion worth of Monsanto Company (NYSE:MON)’s shares, versus 38 funds a quarter earlier. Larry Robbins’ Glenview Capital owns around 11 million shares of the company, according to its latest 13F filing.
On the next page, we will discuss Cabelas, Starwood Hotels, and Alibaba.
