Why Toyota, IBM, Teva, and Two Other Stocks Are in Spotlight Today

All three major indexes are in the red today, as the earnings results of several major companies including Apple Inc. (NASDAQ:AAPL) failed to meet expectations.

Among the stocks that traders are watching are Toyota Motor Corp (ADR) (NYSE:TM), Martin Marietta Materials, Inc. (NYSE:MLM), Vulcan Materials Company (NYSE:VMC), International Business Machines Corp. (NYSE:IBM), and Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA). In this article, we are going to take a closer look at the events that put these companies in the spotlight and will assess the hedge fund sentiment towards them.

At Insider Monkey, we track around 750 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details here).

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Toyota Motor Corp (ADR) (NYSE:TM) announced on Wednesday that it is recalling around 5.8 million vehicles in China, Japan, Europe, and other overseas locations due to potentially faulty airbag inflators manufactured by Takata Corp. The recall affects about 820,000 cars in China, 1.47 million in Europe, and 1.16 million in Japan and includes certain years and makes of the popular Corolla brand. Given that the market has already priced much of the news in, Toyota shares are only marginally down in the morning. Phill Gross and Robert Atchinson‘s Adage Capital Management owned 1.32 million shares of Toyota Motor Corp (ADR) (NYSE:TM) at the end of June.

Traders are watching Vulcan Materials Company (NYSE:VMC) and Martin Marietta Materials, Inc. (NYSE:MLM) after Rohit Seth of Suntrust upgraded both stocks to ‘Buy’ from ‘Hold’, saying that the two has positive catalysts ahead (in his opinion). In particular, Seth thinks the outlook for materials demand is rosy given the potential that Hillary Clinton will increase spending on America’s infrastructure (Donald Trump has also said that he wants to rebuild America’s infrastructure as well). Seth has a $206 price target of Martin Marietta, up from the previous $170 per share. The analyst has a $129 price target on Vulcan, up from the previous $110 per share. Despite the upgrade, both stocks are slightly down due to broader market weakness. Of the 749 funds that we track, 37 were long Martin Marietta Materials, Inc. (NYSE:MLM) and 42 investors held shares of Vulcan Materials Company (NYSE:VMC) at the end of the second quarter.

On the next page, we find out why International Business Machines Corp and Teva Pharmaceutical Industries Ltd are in the spotlight.
Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) and International Business Machines Corp. (NYSE:IBM) are trending after the two announced a substantial expansion of their existing global e-Health alliance. The alliance currently focuses on two key healthcare challenges, the discovering of new treatment options, and the improving of chronic disease management. The expansion of the partnership will feature a new three year research collaboration that will develop cognitive technologies that can hopefully enable a systematic approach to the emerging field of drug repurposing and deliver unprecedented scale in the discovery of new uses for existing drugs. Both initiatives will use the IBM Watson Health Cloud. If successful, Teva will have a more efficient drug pipeline and more revenue, while IBM will be able to make more headway in the critical AI/cloud space, which it has invested substantial resources in and which management hopes will power its growth for the years to come.

According to our data, Warren Buffett’s Berkshire Hathaway owned over 81 million shares of International Business Machines Corp. (NYSE:IBM) and Andreas Halvorsen’s Viking Global held over 27.7  million of Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) on June 30.

Disclosure: None