Why JPMorgan (JPM), Facebook (FB), and Fitbit (FIT) Are Among Today’s Trending Stocks

Despite declining oil and gold prices, the markets are up on Wednesday, driven by surprisingly positive Chinese international trade data and a stronger dollar. Some of the stocks trending today are JPMorgan Chase & Co. (NYSE:JPM), Citigroup Inc (NYSE:C), Arrowhead Pharmaceuticals Inc (NASDAQ:ARWR), Facebook Inc (NASDAQ:FB), and Fitbit Inc (NYSE:FIT), all of which are witnessing robust activity. Let’s take a look into the catalysts pushing the action on these stocks today and see what the hedge funds in our database think about the companies involved.

At Insider Monkey, we track more than 785 hedge funds, whose 13F filings we analyze as part of our small-cap strategy. Our research has shown that imitating a portfolio that includes the 15 most popular small-cap stocks among hedge funds can outperform the market by as much as 95 basis points per month on average (see more details here).

JPMorgan Soars on Earnings Beat

Let’s start with JPMorgan Chase & Co. (NYSE:JPM), probably one of the most relevant stocks today. Shares of the mega-cap bank are up by roughly 4.5% on Wednesday afternoon, following the announcement of the company’s first quarter financial results. Before the market opened this morning, JPMorgan posted earnings of $1.35 per share, $0.09 ahead of the consensus estimate, on revenue of $24.08 billion, which also beat estimates by $680 million. Expectations were somewhat low, so the results seem to have made most analysts happy. For instance, Wells Fargo highlighted “the consumer beat, better-than-feared [investment banking] results, visible cost discipline, and positive fee guidance.”

Among the funds that we track, 100 were long JPMorgan Chase & Co. (NYSE:JPM) at the end of the fourth quarter of 2015. A noteworthy position was that of Alex Snow’s Lansdowne Partners, which disclosed ownership of 20.16 million shares worth more than $1.3 billion as of December 31.

Citi Also Benefits From JPMorgan’s Results

Another bank surging on Wednesday is Citigroup Inc (NYSE:C), which has gained more than 5.3% since the bell rang this morning, driven by JPMorgan’s beat. The company is scheduled to report its own first quarter financial results on Friday, and the Street is predicting earnings of $1.04 per share on revenue of $17.68 billion, down from $1.52 per share and $19.81 billion a year earlier.

Citigroup Inc (NYSE:C) also counts plenty of hedge fund supporters. At the end of the fourth quarter, 106 funds in our database held long positions in the stock, owning 6.5% of its float. The largest of those positions was held by Boykin Curry’s Eagle Capital Management, which declared holding 25.26 million shares of the company valued at $1.3 billion as of December 31.

The latest concerning three other trending stocks is dissected on the following page.

Arrowhead Issues Promising HBV Results

Shares of Arrowhead Pharmaceuticals Inc (NASDAQ:ARWR) are trading up by 10.65% this afternoon, reacting to the announcement of positive data from studies assessing its lead product candidate, ARC-520, for the treatment of chronic hepatitis B infection. Further details will be presented at The International Liver Congress 2016 in Barcelona, Spain this week. At the end of the fourth quarter, Arrowhead Pharmaceuticals Inc (NASDAQ:ARWR) counted the support of seven hedge funds in our system, including QVT Financial. The fund, managed by Daniel Gold, held 1.95 million shares on December 31.

Facebook Tumbles On Weak Ad Data

Opposite to the other stocks in this list, Facebook Inc (NASDAQ:FB) is trading down this afternoon, by about 2.5%, after AdParlor, which describes itself as the “largest social and video advertising platform on the planet,” revealed disappointing data related to first quarter ad spending on the social media platform. According to The Fly, AdParlor said ad spending on the social media platform fell by 18% quarter-over-quarter. Though first quarter ad spending would be expected to be lower than fourth quarter spending, the decline appears to nonetheless be greater than expected.

Facebook Inc (NASDAQ:FB) counted 146 hedge fund backers among those that we track as of the end of 2015, making it the third-most popular stock in our database. Among its supporters, investors can count Stephen Mandel’s Lone Pine Capital, which held 9.78 million Facebook shares worth more than $1 billion on December 31.

Analysts Seem To Love Fitbit

Finally, there’s Fitbit Inc (NYSE:FIT), which is up by about 12% in Wednesday trading, after analysts at Morgan Stanley, Citigroup and Pacific Crest all issued positive commentary on the company. Analysts at Morgan Stanley said they expect the company’s first and second quarter results as well as its full year guidance to top the Street’s estimates, driven by strong demand for the company’s Blaze and Alta trackers. For its part, Citi classified the stock as a “relatively inexpensive” way to play “Out of Favor Tech.” Finally, Pacific Crest experts also said the stock was “attractively priced,” especially taking into account the strong Alta and Blaze sales.

During the fourth quarter of 2015, shares of Fitbit Inc (NYSE:FIT) lost roughly 21.5%, and several major hedge funds took advantage of the depressed prices to build up their positions. The October-to-December period saw the number of funds in our database bullish on the stock soar by 35% to 27. One of the newcomers was Philippe Laffont’s Coatue Management, which started a new position comprising 1.51 million shares.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.