Why Traders Are Keenly Watching Twitter, Zumiez, Idera, and More

Despite Hurricane Matthew barreling its way towards the Southeast, the markets have been relatively quiet overnight, as all three major indexes have shown normal volatility.

In this article, we’ll find out why Twitter Inc (NYSE:TWTR), Zumiez Inc. (NASDAQ:ZUMZ), Idera Pharmaceuticals Inc (NASDAQ:IDRA), Yahoo! Inc. (NASDAQ:YHOO), and Verizon Communications Inc. (NYSE:VZ) are each making headlines, and use the latest SEC filings to determine what the smart money thinks of each stock.

Hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).

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A decision on whether Twitter Inc (NYSE:TWTR) will be sold could occur sooner rather than later. According to Reuters, the social media company has told potential suitors that it wants to wrap up negotiations by October 27, the date when Twitter is slated to report its third quarter results. According to sources, the deadline for binding buy-out offers is over the next two weeks. Like always, there is no guarantee of a sale if the bids are not high enough in the minds of Twitter’s executive team. Alphabet Inc (NASDAQ:GOOG), which was thought to be a major potential player in the bidding, might not be bidding after all, according to this Recode article. The probability of Apple Inc. (NASDAQ:AAPL) making an offer is also low. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 30 of them were long $354.92 million in Twitter Inc (NYSE:TWTR) shares on June 30, which accounted for 3.00% of the float.

Zumiez Inc. (NASDAQ:ZUMZ) shares are up by 12% in extended market trading after the retailer reported strong September sales results. For the five-week period ended October 1, total net sales rose by 11.5%, while comparable sales jumped by 6.3%. Due to the stronger demand, the company raised its fiscal third quarter EPS guidance to $0.29-to-$0.30 from the previous range of $0.21-to-$0.26. Revenue is also expected to be higher, with it now seen coming in at between $216 million and $217 million from the previous estimate of $209 million-to-$213 million. Steve Cohen‘s Point72 Asset Management initiated a new stake of 125,000 shares in Zumiez Inc. (NASDAQ:ZUMZ) during the second quarter.

On the next page, we’ll examine the latest news surrounding Idera Pharmaceuticals, Yahoo!, and Verizon.

Idera Pharmaceuticals Inc (NASDAQ:IDRA) shares have fallen by 13% in after-hours trading after the company announced a public offering of common stock of up to $50 million worth of shares. In connection with the offering, Idera also expects to grant underwriters a typical 30-day option to buy up to an additional 15% of the shares of common stock sold in the offering. Idera intends to use the proceeds for clinical development. Seven funds that we track owned shares of Idera Pharmaceuticals Inc (NASDAQ:IDRA) at the end of the second quarter, down by one quarter-over-quarter.

Yahoo! Inc. (NASDAQ:YHOO) and Verizon Communications Inc. (NYSE:VZ) are again in the spotlight after Yahoo’s former CEO Ross Levinsohn made the following comment concerning Verizon:

“If I were them, just from a business standpoint, I’d probably reserve a bunch of money against the deal or go back to Yahoo and ask for a discount.”

Whether that happens is anyone’s guess. It is also unclear whether the bidding might open up again for other parties if Verizon were to go back and ask for a change to the terms of the deal. Fortunately for Yahoo shareholders, most of the stock’s value is in Alibaba Group Holding Ltd (NYSE:BABA), which has been a steady performer of late.

81 funds in our database were long Yahoo! Inc. (NASDAQ:YHOO) on June 30, while 52 had shares of Verizon Communications Inc. (NYSE:VZ) in their portfolios.

Disclosure: None