Why Alphabet, Sunoco, SolarCity, and More Are Trending

Although there is still one more day to go before the important Russia/OPEC conference, it seems that geopolitical squabbles have again become too much to overcome. Many are now saying a deal is unlikely given that Iran wants the right to increase production all the way to 4.1-to-4.2 million barrels per day, as opposed to Saudi Arabia’s preferred 3.6 million barrels per day.

In this article, we’ll examine five stocks that traders are watching today, which are Alphabet Inc (NASDAQ:GOOG), Tupperware Brands Corporation (NYSE:TUP), CLARCOR Inc. (NYSE:CLC), Sunoco Logistics Partners L.P. (NYSE:SXL), and SolarCity Corp (NASDAQ:SCTY). In addition to discussing the latest news, we’ll find out how hedge funds and other institutions are positioned in each one using the latest regulatory data.

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 the details here).

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Alphabet Inc (NASDAQ:GOOG) is in the spotlight after the company introduced Google Station, a product that aims to bring better Wi-Fi connections to more places. With Google Station, Alphabet hopes to expand its fast Wi-Fi to malls, cafes, phone carriers, and more, so that more people can go online and search, thus bringing Alphabet more revenue. Of the 749 funds that we track which filed 13Fs for the June quarter, 187 of them were long Alphabet Inc (NASDAQ:GOOG)’s class A or class C shares at the end of June, making it the most popular stock among hedge funds.

Traders are watching Tupperware Brands Corporation (NYSE:TUP) after the company announced that it has named a new executive, Patricia Stitzel, who will become COO and President on October 1. Stitzel will be replacing current COO, Simon Hemus, who will in turn step in as the Vice Chairman of the company. Tupperware shares have done well in 2016, rallying by over 17% year-to-date. 14 funds in our system were long Tupperware Brands Corporation (NYSE:TUP) at the end of June, down by seven funds from the end of March.

Investors are applauding CLARCOR Inc. (NYSE:CLC) after the company raised its quarterly dividend by 13.6% to $0.25 per share. The company’s forthcoming dividend payment translates to a forward yield of around 1.57%, or nearly on par with that of the 10-year Treasury bond. Shares of the company are up by nearly 30% year-to-date. 14 funds that we track owned shares of CLARCOR Inc. (NYSE:CLC) at the end of June, up by three quarter-over-quarter.

On the next page we’ll find out why Sunoco Logistics Partners and SolarCity are trending.

Sunoco Logistics Partners L.P. (NYSE:SXL) shares are 6% in the red today after the company announced that it has agreed to buy Vitol’s Permian integrated crude oil business for around $760 million plus working capital. The acquisition provides Sunoco Logistics with a crude oil terminal of about 2 million barrels as well as a crude oil gathering and mainline pipeline system in the Midland Basin, in addition to crude oil inventories related to Vitol’s crude oil purchasing and marketing business. In connection with the acquisition, Energy Transfer Partners and Energy Transfer Equity, the two general partners, have agreed to reduce the incentive distribution the general partner receives by $60 million over two years. To finance the acquisition, Sunoco Logistics has announced the public offering of 21 million common units in addition to granting underwriters a 30-day option to buy an addition 3.15 million common units. Jim Simons‘ Renaissance Technologies upped its stake in Sunoco Logistics Partners L.P. (NYSE:SXL) by 57% in the second quarter to 727,600 shares at the end of June.

Although some in the market don’t think Tesla Motors Inc (NASDAQ:TSLA)’s merger with SolarCity Corp (NASDAQ:SCTY) will succeed, Baird analysts Tyler Frank and Ben Kallo respectfully disagree, saying, “we estimate there is an ~80% probability the merger occurs given conversations with Tesla shareholders… We previously noted SolarCity shares are trading below the value being offered by Tesla, and believe this offers a short-term trading opportunity.” Specifically, seeing as SolarCity shareholders are expected to receive 0.11 Tesla shares for each share of SolarCity they own, SolarCity would be trading at around $22-to-$23 at current Tesla prices, rather than at its current $20 mark, should the merger go through. 26 funds in our database owned shares of SolarCity Corp (NASDAQ:SCTY) at the end of June, up by three funds quarter-over-quarter.

Disclosure: None