Why Traders Are Talking About These 5 Stocks Today

All three indexes are in the green this morning along with crude, as traders are bullish in anticipation of strong earnings reports from corporate America. Among the stocks in the spotlight today are Amazon.com, Inc. (NASDAQ:AMZN), Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Dicks Sporting Goods Inc (NYSE:DKS), Alphabet Inc (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT). In this tech-heavy edition of market trending news, we take a look at why each stock has investors atwitter and how the collection of elite funds tracked by Insider Monkey are positioned in them.

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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Amazon.com Prime Results Strong

Amazon.com, Inc. (NASDAQ:AMZN) is in the spotlight after the e-commerce giant announced that its Prime Day orders rose by 50% in the United States and by 60% worldwide. Given that initial data from third-party merchants indicated that Prime sales rose by only 30% year-over-year, the news of the substantial order jump is certainly good. Another piece of good news could be the number of new sign-ups due to Prime Day. Some analysts estimate that Prime Day helped Amazon bring in millions of new subscribers, many of whom will stick with Amazon after the promotional day. In other news, Amazon has announced that it will renew the award-winning video show Catastrophe for two more years. Stephen Mandel‘s Lone Pine Capital was one of the top shareholders of Amazon.com, Inc. (NASDAQ:AMZN) at the end of March, with a holding of almost 2.00 million shares.

Valeant Comments on Former CEO’s Stock Sale

Valeant Pharmaceuticals Intl Inc (NYSE:VRX) issued a press release today commenting on the recent exercise and sale of 4.4 million shares of the company by former CEO Michael Pearson, who also sold 411,000 common shares throughout June and July. Although the sales of stock by the former CEO could be construed bearishly, Valeant states that it understands Mr. Pearson sold the assets to satisfy tax obligations and for additional liquidity. Valeant notes that Mr. Pearson still owns 3.5 million shares of the company’s stock and continues to believe in its potential. Bill Ackman‘s Pershing Square is a major shareholder of Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and sits on the company’s Board.

On the next page we examine Dicks Sporting Goods, Alphabet Inc, and Microsoft Corporation are in the spotlight today.
Analysts Give Thumbs Up to Dicks Sporting Goods 

Dicks Sporting Goods Inc (NYSE:DKS) is 2.7% in the green today after analysts at RBC Capital upgraded the stock to ‘Outperform’ from ‘Sector Perform’, citing the potential of market share gains after competitor Sports Authority declared bankruptcy. The analysts also raised their price target to $56 from the previous $41 per share mark. RBC analyst Scot Ciccarelli said:

“In our view, the TSA [The Sports Authority] liquidation process will prove to be less disruptive in 2Q and 3Q than expected and management seems increasingly confident that they can capitalize on the ~$2.7 billion of orphaned sales in 2017.”

Of the 766 active funds that we track, 35 funds owned positions in Dicks Sporting Goods Inc (NYSE:DKS) valued at $508.62 million on March 31, a sharp increase from 26 funds holding $341.55 million in positions on December 31.

Tech Giants Watch the Pokemon Go Craze

Although they didn’t produce the cultural phenomenon that is Pokemon Go, Alphabet Inc (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT) could certainly benefit from the trend. Pokemon Go is an augmented reality game that has caught fire since its introduction a few days ago, with the game already garnering more daily active Android users in the United States than Twitter Inc (NYSE:TWTR). The success of the game has lifted partial owner Nintendo’s market cap by almost 50% and has created a growing belief among investors that augmented reality and virtual reality products will eventually become as mainstream as cell phones or PCs.

Given the success of the augmented reality game, traders are increasingly looking toward Microsoft’s introduction of its HoloLens product, and Google’s virtual reality initiatives. Google was an incubator of Niantic Labs, the firm that programmed much of Pokemon Go. Andreas Halvorsen‘s Viking Global reported a holding of more than 2.05 million class A shares of Alphabet Inc (NASDAQ:GOOG) as of the most recent 13F reporting period. Meanwhile, the number of funds in our system with holdings in Microsoft Corporation (NASDAQ:MSFT) rose by four quarter-over-quarter to 144 as of the end of March.

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