Why Traders Are Talking About Chipotle, JPMorgan, and 3 Other Stocks Today

All three major index futures are off by around half-a-percent today after Boston Federal Reserve President Eric Rosengren hinted that he is moving closer to supporting a rate hike, stating that the “risks to the forecast are becoming increasingly two-sided.” Mr. Rosengren’s comments mean a lot, because he has historically been a proponent of low rates.

Among the stocks trending today are Tsakos Energy Navigation Ltd. (NYSE:TNP), Mattress Firm Holding Corp (NASDAQ:MFRM), JPMorgan Chase & Co. (NYSE:JPM), Deutsche Bank AG (USA) (NYSE:DB), and Chipotle Mexican Grill, Inc. (NYSE:CMG). In this article, we’ll analyze the events affecting each stock and check hedge fund holdings data to determine what the smart money thinks of the five equities.

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).

Susan Law Cain / Shutterstock.com

Tsakos Energy Navigation Ltd. (NYSE:TNP) shares are 4% in the red today after the company reported EPS of $0.15 on revenue of $94.8 million for its fiscal second quarter. Although Tsakos’ earnings were in-line with analysts’ estimates, traders didn’t like the fact that the company’s revenue missed by $11.62 million. Sales fell by 20.2% year-over-year as fleet utilization came in at 96.4% and the TCE rate for the period was $21,602. EBITDA for the quarter was $51.3 million versus $76.4 million a year earlier. Jim Simons‘ Renaissance Technologies reported a stake of almost 2.5 million shares in Tsakos Energy Navigation Ltd. (NYSE:TNP) as of June 30, up by 6% from the size of the quant fund’s holding on March 31.

Mattress Firm Holding Corp (NASDAQ:MFRM) is in the spotlight today after the company reported softer-than-expected earnings for its fiscal second quarter. For the period, Mattress Firm earned $0.57 per share, missing the average analyst estimate by $0.08. Revenue came in at $980.01 million, or $19.99 million below the consensus target. Net sales rose by 48.2% year-over-year due to incremental sales from acquired and new stores, which more than offset the comparable-store sales decline of 1.1%. Mattress Firm Chairman Steve Stagner expressed positive sentiment regarding the August 7 purchase of his firm by Steinhoff International, saying:

“We are also moving towards the completion of our transaction with Steinhoff, and believe Steinhoff is the ideal long-term partner for our customers, employees, suppliers and other stakeholders.”

According to our database of 749 hedge funds that filed 13F’s for the June quarter, the number of successful fund managers with holdings in Mattress Firm Holding Corp (NASDAQ:MFRM) fell by three quarter-over-quarter to 15 at the end of June.

On the next page, we’ll examine the events causing JPMorgan, Deutsche Bank, and Chipotle Mexican to trend this morning.

Traders are talking about JPMorgan Chase & Co. (NYSE:JPM) today after analysts at Macquarie downgraded the stock to ‘Neutral’ from ‘Outperform’. The analysts don’t think JPMorgan’s valuation offers as much upside anymore given the stock’s strong rally since February. The analysts also think the interest rate environment for JPMorgan will remain challenging in the near-term. 99 funds that we track owned shares of JPMorgan Chase & Co. (NYSE:JPM) at the end of June, up by two funds quarter-over-quarter. Despite the downgrade, shares of JPMorgan are roughly flat on the day.

Deutsche Bank AG (USA) (NYSE:DB) shares have spiked by 3.75% after the German monthly magazine, Manager Magazin, wrote that the bank is expected to settle with U.S. regulators for over $2.4 billion over cases concerning the previous misselling of mortgage-backed securities. The settlement will remove some uncertainty around the bank stock and help Deutsche Bank control its litigation costs. Analysts were originally anticipating the bank to settle the case for $3.4 billion. 15 funds in our system had a long position in Deutsche Bank AG (USA) (NYSE:DB) at the end of the second quarter.

According to Reuters, Chipotle Mexican Grill, Inc. (NYSE:CMG) has agreed to settle with over 100 customers who were stricken with food poisoning after eating at the burrito chain last year. Although the terms of the settlements are confidential, many investors believe the move to settle is the right thing to do, as it will allow Chipotle to move on from the food safety events and help its management focus on increasing same-store sales again. 39 funds had a long position in Chipotle Mexican Grill, Inc. (NYSE:CMG) as of the most recent 13F reporting period, and Bill Ackman took a $1.2 billion position in the company earlier this month.

Disclosure: None