Why Rigel Pharmaceuticals, American Airlines, Facebook, and More Are in the Spotlight

Although the U.S. weekly initial jobless claims came in 11,000 higher than expected for the week ended October 15, the markets are flat this morning as traders focus on earnings releases.

Among the stocks that traders are also watching today are Deutsche Bank AG (USA) (NYSE:DB), American Airlines Group Inc (NASDAQ:AAL), Rite Aid Corporation (NYSE:RAD), Rigel Pharmaceuticals, Inc. (NASDAQ:RIGL), and Facebook Inc (NASDAQ:FB). Let’s find out why each is in the spotlight and use the latest 13F data to determine hedge fund sentiment towards each stock.

Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 750 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).

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Deutsche Bank AG (USA) (NYSE:DB) shares are 2.6% in the green after Manager Magazin reported that various big-league investors are willing to increase their stake in the bank. According to the article’s sources, the Qatari royal family, Abu Dhabi’s sovereign wealth funds, and an unnamed Chinese investor are all willing to participate in any capital raise and potentially increase their combined stake to around 25% of the company, from their current stake of 10%. Manager Magazin also reported that the bank is confident that it will not have to be pay anywhere near the $14 billion fine levied against it by the U.S Department of Justice. 15 funds in our system were long Deutsche Bank AG (USA) (NYSE:DB) at the end of the second quarter, up by five quarter-over-quarter.

American Airlines Group Inc (NASDAQ:AAL) shares are 1.7% in the red despite the airline reporting solid third quarter numbers. For the period, American Airlines earned $2.80 per share on sales of $10.59 billion, beating the Street’s estimates by an impressive $1.23 on the bottom-line and by $50 million on the top-line. Sales fell by 1.1% year-over-year as total revenue per available seat mile retreated by 2.2% and passenger load factor inched lower by 230 basis points to 83.3%. Shares of the company may be down due to guidance, as the company expects 2017 system capacity to increase by 1% year-over-year and for core CASM to rise by 2%, driven in part by increased labor costs. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 56 owned $1.35 billion worth of American Airlines Group Inc (NASDAQ:AAL) shares on June 30, which accounted for 8.30% of the float.

On the next page we’ll examine the news that has traders buzzing about Rite Aid, Rigel Pharmaceuticals, and Facebook.