Why These Five Stocks Are Making Big Moves Today

Following one of the best trading weeks so far in 2016, the U.S stock market is advancing further on Monday on the back of a growth in oil prices. In this article, we’ll take a look at some of the stocks that are in the spotlight today, including Lumber Liquidators Holdings Inc (NYSE:LL), Groupon Inc (NASDAQ:GRPN), Teck Resources Ltd (USA) (NYSE:TCK), Alcoa Inc (NYSE:AA), and Weight Watchers International, Inc. (NYSE:WTW). Aside from the news that surround these stocks, we are also going to assess the hedge fund sentiment towards these 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 more details here).

First up is Lumber Liquidators Holdings Inc (NYSE:LL), whose stock is down by 20% on the back of a revised report from the Centers for Disease Control and Prevention (CDC), which revealed that the risk of cancer from some of the company’s laminate flooring products is higher than was previously estimated on February 10. After correcting the values to calculate for ceiling height, the new estimates project that the flooring products could cause cancer in 6-to-30 cases, per 100,000 people, triple the 2-to-9 cases were 100,000 that was previously projected. During the fourth quarter, Lumber Liquidators Holdings Inc (NYSE:LL) registered a slight increase in popularity among the funds that we track, with 15 investors holding long positions at the end of December, versus 13 funds a quarter earlier Among them, John W. Rogers’ Ariel Investments was the largest shareholder, reporting ownership of 556,035 shares in its latest 13F filing.

Next on our list is Groupon Inc (NASDAQ:GRPN), whose shares inched up 5% today continuing the trend that started on Friday on news that Alibaba Group Holding Ltd (NYSE:BABA) bought 33 million shares of the company, equal to 5.6% of the company. Analysts at Goldman Sachs are bullish on the company, as they have raised their price target on the stock to $3.9 from $3.5. Among the funds we follow, 20 reported long positions in Groupon Inc (NASDAQ:GRPN) as of the end of December, down by six funds from a quarter earlier. Billionaire Jim Simons’ Renaissance Technologies is long Groupon with 12.41 million shares at the end of December.

Next, we’ve got Teck Resources Ltd (USA) (NYSE:TCK), the natural resource company, whose stock has surged by around 20% so far today, without any particular news influencing the move. Moreover, investors should notice that the stock has jumped by 86% year-to-date, mainly on the back of the recovery registered by the mining industry on the back of commodities prices growth. During the fourth quarter, the number of funds bullish on Teck Resources Ltd (USA) (NYSE:TCK) went down to 15 from 19. Among these funds, Robert Bishop’s Impala Asset Management owns 1.56 million shares  according to its latest 13F filings.

Alcoa Inc (NYSE:AA)’s shares have rallied by 11% after The Fortune Magazine named it as “the most admired metals company” for the fifth consecutive year in an annual ranking regarding corporate reputation. Moreover, the lightweight metals engineering and manufacturing company occupies this prominent place for more than three decades. The ranking is based on surveys of executives; directors and analysts, who rate companies in their industries and Alcoa earned top scores on the main attributes that emphasize on innovation, people management, quality of products and services and corporate social responsibility. A total of 41 funds reported ownership of Alcoa Inc (NYSE:AA) shares as of the end of December. Paul Singer‘s Elliott Management holds the largest stake in the company among the funds we follow, having reported ownership of 67.1 million shares in its latest 13F.

Finally, Weight Watchers International, Inc. (NYSE:WTW)’s shares are off by 5%, which has offset the gains witnessed on Friday on the back of the results of a study funded by the company. Researchers at the Indiana University School of Medicine found in their study that adults with prediabetes lost more weight when using the Weight Watchers program. Hedge funds have been optimistic on Weight Watchers International, Inc. (NYSE:WTW), with 24 funds long the stock at the end of the fourth quarter; up from 14 funds holding shares three months earlier. Andrew Feldstein and Stephen Siderow‘s Blue Mountain Capital owns 2.0 million shares  of Weight Watchers International, according to its latest 13F filing.

Disclosure: None