US stock futures pointed higher on Tuesday morning as investors await Federal Reserve chief Janet Yellen’s testimony in the Senate.
Some important companies which are making headlines today are Herbalife Ltd. (NYSE:HLF), Tesla Motors Inc (NASDAQ:TSLA), Boeing Co (NYSE:BA), Facebook Inc (NASDAQ:FB) and Murphy Oil Corporation (NYSE:MUR). Let’s find out why these stocks are moving today and analyze the hedge funds sentiment towards them.
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 more details here).
bluebay/Shutterstock.com
William Ackman Releases a Video Against Herbalife
Herbalife Ltd. (NYSE:HLF) is in the spotlight today after billionaire investor William Ackman’s Pershing Square Capital Management released a video against the company on Monday showing its, what Ackman calls, “predatory recruiting practices”. Mr. Ackman says that this is the first of many videos to come against the global nutrition company. Pershing Square has previously published several examples of Herbalife’s top distributors’ aggressive tactics that allegedly mislead new recruits. U.S. Federal Trade Commission (FTC) is currently doing a probe into the practices of Herbalife. Herbalife has rejected the allegations by Mr. Ackman, who also made a huge short bet against the stock. Out of nearly 766 funds tracked by Insider Monkey, 37 funds were bullish on Herbalife Ltd. (NYSE:HLF) at the end of the first quarter. Vinit Bodas’ Deccan Value Advisors owns around 95.55 million shares of the company.
Tesla Motors May Start Production Factory in Shanghai
Tesla Motors Inc (NASDAQ:TSLA) inched up in premarket trading today after a report published by Bloomberg claimed that the electric car maker is in talks with a Chinese investment firm for a joint venture in China to build a factory for local production in the country in a deal that may be worth around $9.0 billion. According to a person familiar with the matter, cited by Bloomberg, Tesla has signed a non-binding memorandum of understanding with Jinqiao Group, a Shanghai government-owned company. The report quoted several analysts who think that this venture could make Tesla’s electric vehicles more competitive against its luxury brand rivals like BMW and Audi. As of the end of the first quarter 2016, 39 funds from our database hold long positions in Tesla Motors Inc (NASDAQ:TSLA), up from 29 funds a quarter earlier. Daniel Benton‘s Andor Capital Management owns 500,000 shares of the company.
On the next page, we will discuss the reasons of today’s moves by Boeing, Facebook and Murphy Oil Corporation.
Deutsche Bank Bullish on Boeing
Boeing Co (NYSE:BA) moved 0.08% in the green after an article on Barron’s said that Deutsche Bank’s Myles Walton is bullish on the Seattle-based aerospace firm. The analyst thinks that Boeing has strong prospects for sustainable cash growth and cash return. The bank thinks that there is an “ample” room for the stock to recover because it is significantly underowned and its cash flow valuation is very low. Edgar Wachenheim’s Greenhaven Associates is one of 37 hedge funds from our database that reported stakes in Boeing Co (NYSE:BA) as of the end of the first quarter. It owns approximately 1.26 million shares of the company.
Facebook’s Shareholders Approve a New Class of Non-Voting Shares
Facebook Inc (NASDAQ:FB) is in spotlight after its shareholders have approved a proposal to issue a new class of non-voting shares to facilitate the company’s CEO Mark Zuckerberg to give away his fortune without losing the company’s control. The approved proposal involves two new “Class C” shares for each Class A and Class B share owned by the shareholders, which represents a 3-for-1 stock split. The Class C shares will be publicly traded under a new symbol after the approved proposal goes into action. From our database, 164 funds were bullish on Facebook Inc (NASDAQ:FB) at the end of the first quarter, up from 146 funds a quarter earlier. Andreas Halvorsen’s Viking Global owns more than 20.13 million shares of the company as of the end of March.
Raymond James Ups Rating for Murphy Oil
Murphy Oil Corporation (NYSE:MUR) is on investors’ radar today after Raymond James upgraded the company’s stock to “Market Perform” from “Underperform”. Analysts at Raymond James are “convinced” that the company’s dividend is safe. The firm thinks that the crude oil prices will go to $80 per barrel by the end of next year because of declining global oil supply. As of the end of March, 21 funds own approximately $213.3 million worth of Murphy Oil Corporation (NYSE:MUR)’s stock. The biggest stake was reported by Richard S. Pzena’s Pzena Investment Management, which has around 10.81 million shares of the company.
Disclosure: None
