Why 5 Stocks, Including Macy’s and Coach, Are Going Viral Today

After two sharp down days in the previous three trading sessions, the bulls are back in charge on Wednesday. In the middle of the morning, the Dow is up by over 70 points, the S&P is 0.5% in the green, and the Nasdaq has rallied by almost 0.8% as some traders anticipate news of an interest rate hike coming out of the next FOMC meeting.

Among the stocks traders are talking about today are Nucor Corporation (NYSE:NUE), Agios Pharmaceuticals Inc (NASDAQ:AGIO), Macy’s Inc (NYSE:M), Coach Inc (NYSE:COH), and Air Products & Chemicals, Inc. (NYSE:APD). Let’s find out why each company is being talked about and analyze how successful hedge funds have each stock positioned in their portfolios.

While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).

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Nucor Corporation (NYSE:NUE) is 1% in the red today after it announced earnings guidance for its third quarter. For the period, Nucor’s management expects EPS to be in the range of $0.85-to-$0.90 per diluted share, versus second quarter consolidated net earnings of $0.73 per diluted share. In contrast, analysts were expecting an average of $0.95 per share, as steel imports have declined year-over-year due to various duties. Jim Simons‘ Renaissance Technologies owned 931,800 shares in Nucor Corporation (NYSE:NUE) at the end of the second quarter, down by 13% from the amount owned at the end of the first quarter.

Agios Pharmaceuticals Inc (NASDAQ:AGIO) shares are off by 2% today after the company announced its intention to sell up to $150 million worth of common stock in a public stock offering, in addition to granting underwriters a 30-day option to purchase up to $22.5 million worth of additional shares. The proceeds of the offering are expected to be used to finance the company’s R&D. The pricing of the offering has not been announced yet. 11 funds that we track had a long position in Agios Pharmaceuticals Inc (NASDAQ:AGIO) at the end of June, down by five funds from the end of the previous quarter.

On the next page, we’ll examine the latest on Macy’s, Coach, and Air Products & Chemicals.

Macy’s Inc (NYSE:M) shares are up by almost 3% after analysts at Citigroup upgraded the stock to ‘Buy’ from ‘Neutral’. The analysts like Macy’s free cash flow and its annual dividend of $1.51 per share, good for a 4.35% yield. They also like Macy’s execution and strategy. Shares of the retailer trade for only 10-times forward earnings and have gained just 1.74% this year after today’s gains. 57 funds in our system were long Macy’s Inc (NYSE:M) as of the most recent 13F reporting period.

Going the opposite way is Coach Inc (NYSE:COH), whose shares are off by 2.4% after analysts at Morgan Stanley downgraded the stock to ‘Underweight’ from ‘Equal-weight’. The analysts think that a sustainable turnaround for Coach might be harder than expected. Due to those doubts, the analysts have a $32 price target on the stock, or about $3 under its current price. The analysts said:

“Coach has not grown North America gross profit dollars in a single quarter since the company began disclosing it three years ago. International gross profit and operating income dollars are growing +L-MSD, but investors are paying for a North America turnaround, not an international one.”

The number of funds in our system with holdings in Coach Inc (NYSE:COH) fell by one during the second quarter to 36.

Air Products & Chemicals, Inc. (NYSE:APD) is in the headlines today after filings revealed that Bill Ackman‘s Pershing Square has cut its position by 3.6 million shares, bringing the hedge fund’s stake down to 16.9 million shares, which account for 7.8% of the company’s float. Air Products & Chemicals has done well in 2016, rising by almost 15% year-to-date. Given the solid performance, it is understandable why Ackman would want to take some money off the table. 56 funds in our database were long Air Products & Chemicals, Inc. (NYSE:APD) at the end of the second quarter.

Disclosure: None