In late afternoon trading, the markets are relatively calm and up sharply despite the news that Attorney General Jeff Sessions has announced his resignation. Although the resignation of Senator Sessions has arguably been expected by many, the gravity of the move could potentially lead to unexpected situations down the road that could affect stock prices. Among equities, several news events have caused traders to pay more attention to Advanced Micro Devices Inc. (NASDAQ:AMD), Micron Technology Inc. (NASDAQ:MU), Diplomat Pharmacy Inc. (NYSE:DPLO), SeaWorld Entertainment Inc (NYSE:SEAS), and Six Flags Entertainment Corp (NYSE:SIX). Let’s analyze further.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 17.4% year to date and outperformed the market by more than 14 percentage points this year. This strategy also outperformed the market by 3 percentage points in the fourth quarter despite the market volatility (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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Advanced Micro Devices Inc. (NASDAQ:AMD) is up by almost 5% after Christain Schwab of Craig-Hallum raised his price target to $27 from the previous $21. The analyst raised his price, citing increased confidence in AMD’s product portfolio strength, which could drive more market share gains and sales growth in the future. Similarly, Mark Lipacis of Jefferies is bullish, citing 3 ‘watershed events’ over the next half year such as the 7nm graphics GPU, the 7 nm server micro processing unit, and AWS deploying AMD server MPU instances at a discount to Intel that could improve AMD’s data-center position. Out of the around 650 elite funds we track, 27 were long Advanced Micro Devices Inc. (NASDAQ:AMD) at the end of June, down 4 from the end of March.
Speaking of chip makers, Micron Technology Inc. (NASDAQ:MU) is 2.6% in the green after the company announced the immediate broad market availability of the world’s first QLC SSD, the Micron 5210 ION enterprise SATA SSD. The product targets read-intensive applications such as machine learning and AI, and could help MU strengthen its position in quad-level cell NAND tech. Given how important AI is in the future, MU solidifying its position in the important field is arguably good news. In terms of smart money sentiment, the number of top funds with long positions in Micron Technology Inc. (NASDAQ:MU) fell by 10 quarter over quarter to 66 at the end of Q2.
Diplomat Pharmacy Inc. (NYSE:DPLO) shares have retreated 27% after the company reported an underwhelming third quarter. Although the market was expecting $0.22 per share in earnings and $1.42 billion in sales, Diplomat Pharmacy reported $0 in earnings per share and $1.373 billion in sales for the time period instead instead. In terms of FY18, management sees net income between a loss of $7.5 million and earnings of $2.6 million and adjusted EBITDA in the range of $164-$170 million. As a result of the report, Eric Coldwell of Baird downgraded the stock to ‘Underperform’ from ‘Neutral’ and set a $10 price target. 13 top funds we track owned around $65 million worth of Diplomat Pharmacy Inc. (NYSE:DPLO) at the end of June.
SeaWorld Entertainment Inc (NYSE:SEAS) shares are higher by almost 4% after Blogger Themed Reality disclosed that Six Flags Entertainment Corp (NYSE:SIX) was in negotiations to buy some or all of the company’s parks. A full combination of the two could make a pretty competitive company as Six Flags is the seventh largest theme park operator globally while SeaWorld is the ninth largest. That being said, there has been rumored interest among others in potentially buying SeaWorld in the past but no deals have arisen from that. SeaWorld has not commented on the report yet. According to our data, 16 elite funds owned SeaWorld Entertainment Inc (NYSE:SEAS) and the same number were long Six Flags Entertainment Corp (NYSE:SIX) at the end of Q2.
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