Valeant, BP, Euroseas, and More: Here’s Why These Stocks Are Trending Today

In mid-day action, WTI futures are trading above $45 per barrel as OPEC’s November 30 meeting to iron out the details of their proposed production cut nears. In this article, we find out why traders are talking about Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Euroseas Ltd. (NASDAQ:ESEA), Seanergy Maritime Holdings Corp. (NASDAQ:SHIP), BP plc (ADR) (NYSE:BP), and ConocoPhillips (NYSE:COP) and use 13F data to determine how elite funds were positioned among them.

Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 700 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).

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Although it is hoping to offload some of its non-core assets and perhaps change its name in the future, Valeant Pharmaceuticals Intl Inc (NYSE:VRX) shares have popped 3.6% after Reuters reported that the company has received offers for some of its core assets as well. While the exact assets or the details of the offers were not released, some traders are bidding shares up in hopes that the news will improve sentiment around the stock. Of the 749 top funds that we track, 60 had a bullish position in Valeant Pharmaceuticals Intl Inc (NYSE:VRX) at the end of the second quarter, down 11 funds from the previous quarter.

While there is no fundamental news driving their rally, nano-caps Seanergy Maritime Holdings Corp. (NASDAQ:SHIP) and Euroseas Ltd. (NASDAQ:ESEA) are in belated bull-mode today. Traders have bid up both stocks by over 80% on the back of speculation that a Trump Presidency might somehow benefit their business. Although conventional wisdom says that Trump’s administration might not help dry bulk shipping rates given that the billionaire’s anti-China stance and his protectionist policies might lower demand, some traders are evidently thinking that something else will happen that might benefit both companies. As to what that is, we’re not sure. According to our records, no elite funds in our database were long Seanergy Maritime Holdings Corp. (NASDAQ:SHIP) and three were long Euroseas Ltd. (NASDAQ:ESEA)  at the end of Q2. As with all nano-caps, traders should do due-diligence on both sides of the trade.

On the next page, we find out why BP plc (ADR), and ConocoPhillips are trending.

ConocoPhillips (NYSE:COP) and BP plc (ADR) (NYSE:BP) are in the spotlight after Asit Sen of CLSA downgraded both stocks. Specifically, Sen lowered his rating for ConocoPhillips to ‘Underperform’ from ‘Outperform’ due to the E&P’s lack of exposure to the competitive Midland and Delaware regions in Texas. Sen also thinks that management should be paying down debt rather than potentially spending up to $3 billion to buy back stock. The analyst has a $47 price target on ConocoPhillips. As for BP, Sen trimmed his price target to $37 from the previous $40 per share, saying that he would prefer to see more visibility on BP’s lower 48 strategy.

Despite the downgrade, both stocks are well in the green today due to the rallying Brent/WTI futures. 40 and 43 funds tracked by Insider Monkey were long BP plc (ADR) (NYSE:BP) and ConocoPhillips (NYSE:COP) at the end of the second quarter.

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