Why Taser, Digital Ally, Deutsche Bank, and More Are in the Spotlight

After opening well in the green on the back of strong earnings out of several banks, the broader markets have retraced somewhat as traders await the earnings results out of a broader selection of companies in the days to come.

Among the stocks that traders are also watching today are Deutsche Bank AG (USA) (NYSE:DB), TASER International, Inc. (NASDAQ:TASR), Digital Ally, Inc. (NASDAQ:DGLY), Exxon Mobil Corporation (NYSE:XOM), and Total SA (ADR) (NYSE:TOT). Let’s analyze the associated catalysts for each stock today and see how the smart money is positioned in 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 the details here).

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Deutsche Bank AG (USA) (NYSE:DB) is in the spotlight after the Wall Street Journal reported that the German government has ruled out taking a direct stake in the bank, with some Chancellery aids saying that the action was “inconceivable”. Given the very high political cost of bailing out the bank for Angela Merkel, it seems that the government is trying to put together a private market solution instead. In the past, reports have said that various German blue-chips are willing to provide low-digit billions of euros in case Deutsche Bank needed it. There is also the possibility that the Department of Justice will settle with Deutsche Bank at a figure lower than the headline $14 billion for the institution’s past mortgage-related misdeeds.Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 15 funds owned $48.11 million in Deutsche Bank AG (USA) (NYSE:DB) shares on June 30, up from just ten funds with $23.98 million in Deutsche Bank holdings on March 31.

TASER International, Inc. (NASDAQ:TASR) shares have rallied by 4.5% after Jeff Kessler of Imperial Capital initiated coverage of the stock with an ‘Outperform’ rating and $27 price target. Kessler thinks Taser’s dominant market share and its high brand awareness gives it a “significant leading advantage” that could deliver value for shareholders. The analyst also notes that Taser’s weapons carry a very healthy 70% margin and that demand for those weapons is rising. Richard Driehaus‘ Driehaus Capital raised its stake in TASER International, Inc. (NASDAQ:TASR) by 152% in the second quarter to just under 300,000 shares as of the end of June.

On the next page we’ll put Digital Ally, Exxon Mobil Corporation, and Total SA under the microscope.