Why Are These Five Stocks in the Spotlight on Monday?

Partnerships and asset sales rang the opening bell on Monday, November 9, with Ericsson (ADR) (NASDAQ:ERIC), Cisco Systems, Inc. (NASDAQ:CSCO), General Electric Company (NYSE:GE), Alibaba Group Holding Ltd (NYSE:BABA), and Marriott International Inc (NASDAQ:MAR) being in the spotlight on the back of various reasons. Let’s take a closer look at the news behind the today’s performance of these stocks and see how the funds from our database have been trading them.

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We pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular small-cap stock picks in real time since the end of August 2012. These stocks have returned 102% since then and outperformed the S&P 500 Index by around 53 percentage points (see more details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.

Telecommunication giants Ericsson (ADR) (NASDAQ:ERIC) and Cisco Systems, Inc. (NASDAQ:CSCO) are about to change the game in the industry as they team up to collaborate most of their businesses. In the strategic partnership, the telcos expect to rake in $1 billion each in revenues, though they were mum on the investment details. While most financial details of the deal were not disclosed, Ericsson expects to receive patent license fees from Cisco Systems, Inc. (NASDAQ:CSCO).

Ericsson (ADR) (NASDAQ:ERIC) CEO Hans Vestberg clarified in an interview with TechCrunch that the deal is not a merger, and that an acquisition, a merger or a joint venture was “never on the table,” seeing any of those would “slow things down significantly” in their respective companies. In this way, Ericsson (ADR) (NASDAQ:ERIC)’s shares are rising, while Cisco Systems, Inc. (NASDAQ:CSCO)’s stock is on a downward movement today. At the end of June, 12 funds from our database held shares of Ericsson and 72 funds  held around 3% of Cisco’s outstanding stock.

General Electric Company (NYSE:GE)’s stock has declined after the company announced striking a deal to sell the last of its GE Capital business in Australia and New Zealand for $1.34 billion, including debt, to Bain Capital affiliate Sankaty Advisors. The sale of General Electric Company (NYSE:GE)’s Australian and New Zealand commercial lending and leasing businesses is part of a bigger move to reduce the size of GE Capital. Following necessary regulatory approvals, the deal is scheduled to close by the end of the first quarter in 2016. GE will retain the financing businesses that relate directly to its industrial businesses. By the end of June, 70 funds from our database held 1.40% of GE’s outstanding stock.

In another development, the shares of Alibaba Group Holding Ltd (NYSE:BABA) and Marriott International Inc (NASDAQ:MAR) have on the back of the disclosure of an alliance between the two companies to serve Chinese clients with a platform to book their hotel reservations online. Clients of Alibaba Group’s subsidiary Alitrip will have access to Marriott’s international hotel portfolio on their desktops and on mobile through an online flagship store. In the future, the team up expects to look into Alitrip’s “Post Post Pay” to allow the clients to book without paying a deposit and to enjoy an express checkout service. Earlier in September, Marriott International Inc (NASDAQ:MAR) signed a deal with another Alibaba Group Holding Ltd (NYSE:BABA) affiliate  – Ant Financial Services Group – to provide Alipay for Marriott’s hotels and resorts.

A total of 85 funds in our database held 2.30% of Alibaba Group Holding Ltd (NYSE:BABA)’s outstanding stock, while 31 funds reported long positions in Marriott International Inc (NASDAQ:MAR), amassing 2.50% of the company at the end of June.

Disclosure: None