In Friday intraday trading, two stocks have been trending as they moved in opposite directions as large volumes of shares changed hands. One of them, Texas Instruments Incorporated (NASDAQ:TXN), had started the session in the red, but managed to recoup the losses and has inched up by 0.8% so far. On the other hand, AK Steel Holding Corp (NYSE:AKS) opened several percent higher, but then retracted and currently stands at around 0.2% in green. Both stocks have been affected by the news regarding the companies they represent and in this article we will take a look at both of them. In addition, we will see what hedge funds sentiment can tell about the companies and whether they are worth your attention.
We pay attention to the hedge fund sentiment, because we are convinced that they are the perfect investors to emulate. We base this belief on extensive studies that covered the period between 1999 and 2012, which showed that a particular segment of hedge funds’ investments is actually worth following. We are talking about hedge funds’ small-cap ideas, which in backtests showed a return of almost one percentage point above the market. Our small-cap strategy focuses on identifying 15 most popular small-cap stocks among hedge funds, and it has returned 118% since August 2012, outperforming the market by around 60 percentage points (see more details here).
With this in mind, let’s take a closer look at Texas Instruments Incorporated (NASDAQ:TXN), which designs and makes semiconductors that it sells to electronics manufacturers. Earlier today, the company announced plans to raise its quarterly dividend by 12% and to add $7.5 billion to its share buyback program even if it had $1.8 billion remaining under the previous buyback authorization at the end of June. Texas Instruments (NASDAQ:TXN) also declared that, on November 16, stockholders of record on October 30, will be paid a dividend of $0.38 per share, up from $0.30 before.
At the end of the second quarter, the number of hedge funds holding stakes in Texas Instruments Incorporated (NASDAQ:TXN) dropped to 33 from 38 a quarter earlier, while the aggregate value of their holdings declined to $532.51 million, equivalent to 1% of the company, from $634.92 million, impacted by a 9% decline of the stock during the quarter. According to our database, Cliff Asness‘ AQR Capital Management holds the largest position in Texas Instruments, with 2.07 million shares worth $106.71 million as of the end of June. Phill Gross and Robert Atchinson’s Adage Capital Management trails AQR with a $69.03 million position that contains 1.34 million shares. Joel Greenblatt’s Gotham Asset Management is the third-largest shareholder, which owns 1.08 million shares valued at $55.62 million.
The stock of AK Steel Holding Corp (NYSE:AKS), a company that engages in producing flat-rolled carbon, stainless and electrical steels, and tubular products through its subsidiary, was affected by the company’s guidance for the third quarter of fiscal 2015 released earlier today. The company said it expects to deliver a loss in the range between $0.02 and $0.07 per diluted share. The news stirred investors because the projected results are slightly worse than the loss of $0.05 per share that the company posted for the third quarter of the previous fiscal year, but are much higher than the loss of $0.36 per diluted share in the second quarter. The preliminary third quarter loss also beats the forecast of $0.23 per share. AK Steel Holding Corp (NYSE:AKS) expects positive financial effects of higher shipments, lower raw material costs, and cost reduction efforts during the third quarter.
From the list of hedge funds that we track, the number of funds bullish on AK Steel Holding Corp (NYSE:AKS) remained flat during the second quarter at 34, but the total value of their positions went up to $141.46 million, representing 20.60% of the company, from $140.90 million at the end of March. Among the investors that hold stakes in the company, Kenneth Tropin‘s Graham Capital Management had the biggest position at the end of June with 14.5 million shares worth $14.71 million, followed by Israel Englander’s Millennium Management, with 7.53 million shares worth $29.15 million. The third largest shareholder of AK Steel Holding Corp (NYSE:AKS) is Dmitry Balyasny’s Balyasny Asset Management, which has a $22.69 million stake in the company, which contains 5.86 million shares.
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