Why Are Traders Buzzing About These Five Stocks on Wednesday?

The S&P 500 opened higher on Wednesday as crude prices are above $50 and many traders expect Britain to remain inside the EU tomorrow.

Among the stocks trending this morning are InterDigital, Inc. (NASDAQ:IDCC), QEP Resources Inc (NYSE:QEP), KB Home (NYSE:KBH), HP Inc (NYSE:HPQ), and LendingClub Corp (NYSE:LC). Let’s find out why each stock is in the spotlight and see how the world’s greatest investors are positioned among the five stocks. 

We believe that imitating hedge funds and other large institutional investors can be helpful in identifying stocks capable of outperforming the broader market. Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).

Ken Wolter / Shutterstock.com

InterDigital Guides Lower

InterDigital, Inc. (NASDAQ:IDCC) is in the spotlight after the company posted guidance for second quarter revenue of $75 to $77 million, which is below the analyst’s consensus estimate of $85.93 million. On the plus side, the revenue guidance is comprised almost entirely of recurring revenue and it does not include the amounts collected from Huawei in the second quarter of 2016 that were due and outstanding under the arbitration awards at the time of payment. Among the funds we track, 21 funds owned shares of InterDigital, Inc. (NASDAQ:IDCC) at the end of the first quarter, up by two funds from the previous quarter.

QEP Resources Expands

With higher oil prices comes the inevitable M&A deals. QEP Resources Inc (NYSE:QEP) became the latest energy company to make an acquisition by acquiring additional oil properties in the core of the Permian Basin for around $600 million. The properties are located in Martin County, Texas, and will increase QEP’s Permian potential drilling locations by over 50%. Current net production in the 9,400 net acreage is 1,400 BOE per day, of which 83% is crude oil. Net proved reserves amount to around 76 MMBoe. QEP will commence an underwritten public offering of 20 million shares of common stock and grant underwriters a 30-day option to purchase up to 3 million additional shares to finance the acquisition. Given the dilution, QEP shares have slid by around 6% so far. Among the funds we track, 30 funds owned $380.28 million worth of QEP Resources Inc (NYSE:QEP)’s stock, which accounted for 15.20% of the float on March 31, versus 27 funds and $320.24 million, respectively, a quarter earlier.

On the next page, we examine KB Home, HP Inc, and LendingClub Corp.

KB Home Reports Earnings

KB Home (NYSE:KBH) shares are over 3% higher after the home builder reported fiscal second quarter earnings of $0.17 per share on revenue of $811 million, beating the consensus estimates by $0.03 per share and $63.94 million, respectively. Total revenue and deliveries both jumped by around 30% year-over-year, while adjusted housing gross profit margin rose 40 basis points to 20.7%. The average selling price of a home inched up by 2% year-over-year to $346,700 per unit. The number of funds tracked by us with holdings in KB Home (NYSE:KBH) fell by two quarter-over-quarter to 18 at the end of March.

HP Issues Bullish Guidance

HP Inc (NYSE:HPQ) recently has provided its fiscal 2016 third quarter outlook, with adjusted EPS guidance of $0.43 to $0.46 versus the consensus estimate of $0.39. The company also reaffirmed full-year adjusted EPS guidance of $1.59 to $1.65 and the company anticipates full year free cash flow between $2 and $2.3 billion. Shares of HP Inc are up 15% year-to-date and trade at a 8.11 forward P/E. At the end of March, 40  funds from our database owned shares of HP Inc (NYSE:HPQ).

Goldman Sachs Lowers PT on LendingClub 

The stock of peer-to-peer lender LendingClub Corp (NYSE:LC) is trending today after analysts at Goldman Sachs reiterated their ‘Neutral’ rating, but lowered their price target on the stock to $4.30 from $4.40 per share. The analysts lowered their price target because LendingClub’s loan prospectuses show that the company’s originations might have dropped in the second quarter. According to a third party aggregation of loan offerings garnered from SEC filings, Lending Club may have done $1.5 billion of standard loan offerings in the second quarter to date. That’s off by 17% year-over-year if true. Among the funds we track, 23 funds had a position in LendingClub Corp (NYSE:LC) at the end of the first quarter.

Disclosure: none