Why Yum, Booz Allen Hamilton, Alnylam, and More Are in the Spotlight

Many traders are watching crude futures today to see if WTI can break out of the $50 per barrel mark. On one hand, there will likely be strong resistance given the past failures of several rallies at that level, and the recent commentary by Goldman Sachs which claimed that oil’s rally would run into a wall of resistance at $55. On the other hand, WTI has rallied strongly in recent days and sentiment around the commodity is somewhat bullish.

In this article, we’ll take a closer look at five stocks that are commanding the spotlight today, which are Yum! Brands, Inc. (NYSE:YUM), Booz Allen Hamilton Holding Corporation (NYSE:BAH), Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), The Medicines Company (NASDAQ:MDCO), and Resources Connection, Inc. (NASDAQ:RECN). We’ll also delve into the latest 13F data to uncover how the smart money traded each stock during the second quarter.

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 the details here).

Nils Versemann / Shutterstock.com

Yum! Brands, Inc. (NYSE:YUM) shares are 2% lower in extended market trading after the company reported earnings of $1.09 per share on revenue of $3.32 billion for its third quarter. Yum’s bottom-line results were in-line with the Street’s estimates, while the company’s top-line missed by $200 million. According to the company, same-store sales inched up 4% year-over-year for its KFC division, including U.S. same-store sales growing by 6%. China core operating profit jumped by 14%, and the company is on track to finalize the separation of its operations in China on November 1, 2016. Year-to-date through October 4, the company has repurchased 54.5 million shares at an average price of $82. Yum expects to repurchase an additional $0.9 billion worth of its shares before the end of 2016. Stephen Mandel‘s Lone Pine Capital raised its stake in Yum! Brands, Inc. (NYSE:YUM) by 560% during the second quarter to just under 10 million shares at the end of June.

Booz Allen Hamilton Holding Corporation (NYSE:BAH) is in the spotlight after the company’s stock fell by 3.7% on Wednesday on the news that one of its employees had been arrested by the FBI. The employee, who has since been fired, has been charged with the theft of government property, particularly in relation to classified information used by the NSA. Booz Allen is cooperating fully with the government to help it get to the bottom of the case. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 27 of them were long Booz Allen Hamilton Holding Corporation (NYSE:BAH) at the end of the second quarter, up by nine funds from the end of the first quarter.

On the next page, we’ll find out why Alnylam Pharmaceuticals, The Medicines Company, and Resources Connection are taking it on the chin in extended trading.