Why Apple, Microsoft, Corning, Ariad, and More Are in the Spotlight

The markets are relatively quiet as the latest data shows that durable goods orders in the United States were relatively flat month-over-month in August. While the data will not do much to inspire confidence, it did best the expected 1.4% decline.

Among the stocks making some waves today are two giant technology companies, Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT), and three other companies ,Actuant Corporation (NYSE:ATU), Corning Incorporated (NYSE:GLW), and Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA). In this article, we’ll analyze how the smart money feels about each of the five stocks and find out why traders are watching them.

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).

Ellica / Shutterstock.com

Apple Inc. (NASDAQ:AAPL) is in the spotlight after Digitimes reported that the tech giant has increased parts orders for iPhone 7 devices and that order visibility for the fourth quarter is 20%-to-30% higher than expected. Increased supplier orders is a good indication that Apple is seeing strong demand for the new iPhones which it expects will continue. Shares of Apple have done well in 2016, rising by 9.2% year-to-date, as investors buy the stock for its cheap forward P/E and for the potential buybacks made possible by bringing some of its foreign cash horde back home next year. David Einhorn‘s Greenlight Capital trimmed its stake in Apple Inc. (NASDAQ:AAPL) by 17% during the second quarter to just over 6.85 million shares as of the end of June.

Actuant Corporation (NYSE:ATU) earned $0.30 per share on revenue of $275.8 million for the fourth quarter of its fiscal year 2016, meeting EPS estimates, but missing the top-line consensus estimate by $1.8 million. Core sales were 11% lower year-over-year as demand waned compared to its fiscal 2015. In terms of guidance,  the company estimates fiscal 2017 EPS will come in between $1.00 and $1.20 when excluding restructuring charges, while sales will hit somewhere between $1.075 billion and $1.125 billion. Both marks fell below analysts’ own expectations of $1.23 and $1.16 billion respectively, even on the high-end of the company’s guidance ranges. Nonetheless, Actuant shares are up by 1% this morning. Of the 749 funds that we track which filed 13Fs for the June quarter, nine of them owned $212.69 million worth of Actuant Corporation (NYSE:ATU) shares on June 30, which accounted for 16.00% of the float.

On the next page we’ll examine why Corning Incorporated, Microsoft Corporation, and Ariad Pharmaceuticals are making headlines today.

Corning Incorporated (NYSE:GLW) is 0.6% in the green today after Susquehanna bumped up its price target on the stock to $27 per share from $25. The firm raised its target due to channel checks that show demand for larger screen/thinner TVs potentially being stronger-than-expected, an event that would increase Corning’s glass demand. Corning has already had a great year, rising by over 30% year-to-date. The number of funds in our system with holdings in Corning Incorporated (NYSE:GLW) rose by one during the second quarter to 32 at the end of June.

According to Bloomberg, Microsoft Corporation (NASDAQ:MSFT) received some bad news in Russia recently, as the city of Moscow will apparently replace various Microsoft software programs with domestic software, including Microsoft Exchange Server and Outlook. Moscow is doing so to heed President Vladimir Putin’s initiative of reducing the country’s dependence on American information technology at a time when relations with the U.S. aren’t exactly the best. According to the article, Russian government entities are estimated to spend around $295 million annually on foreign software. 131 funds in our system owned shares of Microsoft Corporation (NASDAQ:MSFT) as of the most recent 13F reporting period, down by 13 funds from the previous reporting period.

Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) shares are 1.7% in the green after its commercialization partner in Japan, Otsuka Pharmaceutical, received the green light from regulators in the country to market Iclusig for the treatment of two conditions: chronic myeloid leukemia resistant or intolerant to preceding drug treatment, and relapsed or treatment-resistant Philadelphia chromosome-positive acute lymphoblastic leukemia. The Japanese regulator’s approval entitles ARIAD to a $10 million milestone payment from Otsuka. 27 funds that we track were long around 23.10% of Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA)’s float on June 30.

Disclosure: None