Today’s Trending Stocks: Ruby Tuesday, Deutsche Bank, Qualcomm, and More

Many traders are watching various insurers and Florida-based companies as Hurricane Matthew is expected to wreak havoc on Friday.

In addition to watching hurricane-related stocks, traders are also keenly watching the price action associated with Ruby Tuesday, Inc. (NYSE:RT), Mistras Group Inc (NYSE:MG), Deutsche Bank AG (USA) (NYSE:DB), QUALCOMM, Inc. (NASDAQ:QCOM), and NXP Semiconductors NV (NASDAQ:NXPI). Let’s find out why each stock has their attention and see what the smart money thinks of them.

At Insider Monkey, we track around 750 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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Ruby Tuesday, Inc. (NYSE:RT) is in the red after the company reported the results for its first quarter of fiscal year 2017, which amounted to a loss of $0.11 per share on sales of $256.65 million. Although the company’s bottom-line was in-line with the Street’s expectations, revenue dipped by 8.2% year-over-year, due in part to a net reduction of 109 company-owned restaurants as well as a 2.7% decrease in same-restaurant sales. Some traders didn’t like the fact that Ruby Tuesday suspended guidance either, with Ruby Tuesday saying:

“The Company plans to accelerate the execution of its Fresh Start Initiatives under new leadership to better address the challenges currently facing the business, and as a result is discontinuing providing guidance so that it can focus on long-term strategic objectives.”

Steve Tannenbaum‘s Greenwood Investments inched up its stake in Ruby Tuesday, Inc. (NYSE:RT) by 6% in the second quarter, to 884,296 shares on June 30.

Mistras Group Inc (NYSE:MG) shares have fallen by more than 5% in after-hours trading after the company reported mixed results for its own fiscal 2017 first quarter. Although Mistras’ bottom-line for the period beat estimates by $0.02 per share with EPS of $0.22, the company’s top-line missed by $5.96 million, falling by 6.3% year-over-year to revenue of $168.44 million. Profits exceeded estimates in part due to gross profit margin for the period inching up by 120 basis points year-over-year and adjusted EBITDA margin rising by 0.2 percentage points to 12.6% from the comparable period of its previous fiscal year. The company’s outlook may be the real reason for Mistras’ decline, as it lowered its fiscal year 2017 EPS outlook to $0.88-to-$0.97 from the previous $0.99-to-$1.12 range. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 12 owned shares of Mistras Group Inc (NYSE:MG) as of June 30.

On the next page we’ll examine why traders are watching Deutsche Bank AG (USA), QUALCOMM, and NXP Semiconductors NV.

Deutsche Bank AG (USA) (NYSE:DB) is in the spotlight after German newspaper Handelsblatt reported that several German blue-chips are ready to offer a capital injection that could potentially amount to billions of euros should the bank need it. Under the plan, the companies would buy the bank’s stock to boost its reserves. Many investors believe a private sector bail-out would be more preferable than a public bailout given the political costs to Angela Merkel if the latter scenario arose. Ideally, however, many bulls hope Deutsche Bank will settle with the DOJ for a smaller amount than what the market expects for its past mortgage-securities-related misdeeds dating back to the financial crisis. Thomas G. Maheras’ Tegean Capital Management established a new stake of 400,000 shares in Deutsche Bank AG (USA) (NYSE:DB) during the second quarter.

The market has more information concerning NXP Semiconductors NV (NASDAQ:NXPI)‘s talks to potentially sell itself to QUALCOMM, Inc. (NASDAQ:QCOM). According to Bloomberg, Qualcomm is currently the only company in talks to buy NXP and the two sides are less than 10% apart in terms of the price needed to get a deal past the finish line. NXP is targeting a price of $120 per share, while Qualcomm is pushing for a price of $110 per share. In addition, NXP would prefer the takeout price to be all-cash, while Qualcomm would like 25% of the purchase to be made with stock.

According to our records, 48 hedge funds that we track owned shares of QUALCOMM, Inc. (NASDAQ:QCOM) at the end of June, while 57 were long NXP Semiconductors NV (NASDAQ:NXPI).

Disclosure: None