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In the past two years, there has been a battle between new and old tech. Old dogs like Microsoft (NASDAQ:MSFT) and Adobe (NASDAQ:ADBE) needed to learn new tricks in order to compete in this new tech era where companies like Salesforce.com (NYSE:CRM) and Amazon (NASDAQ:AMZN) are all the rage. The aforementioned two did but some like IBM (NASDAQ:IBM) still are trying to make the turn. The cloud is where all tech wants to be.Nvdia (NASDAQ:NVDA) skirts the line between the new and the old tech. Last year, it caught the attention of Wall Street as the new king of the chip jungle. But since its peak of $290 per share last October, it got cut in more than half. And even through yesterday, not many were suggesting any reason to own it. This, to me, was a sign to dip my toe in the Nvidia stock waters.When management guided down in January, they set the default consensus that NVDA stock is doomed, so they caused the stock to run out of incremental sellers. This is the same as saying that the weak hands are all out already. When that happens, usually a stock will need significantly worse new reasons to fall further.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThis notion is proven right today, as the stock is rallying on relatively bad news. Last night NVDA reported earnings and they missed on a few metrics, yet they beat on revenue and earnings, and the stock rose on the headline. Investors now believe that they are rectifying the sales mix that plagued them last year. * 10 Hot Stocks Leading the Market's Blitz Higher Fundamentally, Nvidia stock at $290 was very frothy. But when it fell from grace, it became a bargain compared to what it was before. It now sports a trailing-12-months price-to-earnings ratio of 21 and for a growth company that is very reasonable. Compare this to Netflix (NASDAQ:NFLX), AMZN or Chipotle (NYSE:CMG). These wall street darlings' P/E are 133, 80 and 96 respectively.If you compare NVDA to its competitors, it is twice as expensive as Intel (NASDAQ:INTC) but more than three times cheaper than Advanced Micro Devices (NASDAQ:AMD). So any which way you consider it, it's not grossly over priced. Owning it here means that I would be buying value for it to appreciate over time.Part of what caused its demise was its ties to the Crypto-craze of 2018. Speculators used its chips to mine bitcoins and other Crypto-currencies. But since the prices of those collapsed, that made mining them a losing proposition. NVDA suffered sales mix issues that dragged sentiment down as a whole. Add to this that overall the markets last year were hideous then it was normal to over-react on the downside just like they did on the upside.By now, these ties to bitcoin are dead and traders can fall back in love with NVDA's core competency once more. This is a momentum stock, as you can clearly see from the 12-month price range, so it won't give us clear entry points. All I know is that over time, stocks of quality companies will rise. So this is a relatively safe spot to buy a starter position of NVDA stock. If I already own it, depending on my base price I could add to it to average down.For those who use options, I like to sell puts below support levels to generate income. This means that I commit to buying the shares below and if it indeed falls then I buy them at that price. Otherwise I would have generated income out of thin air.Another way to use options is to sell covered calls. So if I own shares I can create my own dividends. This hedges my longs a bit by betting against my asset. Some even like to buy the shares for the purpose of writing calls against them.The bottom line is that Nvida is a great American company and it is working its way back into Wall Street's favor. Currently there are a lot of analysts who have a "hold" rating on the stock, so some of them may want to rejoin the bull herd and upgrade the stock. It currently trades well below their average price target around $188.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. You can follow him as @racernic on Twitter and Stocktwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * Should You Buy, Sell, Or Hold These 7 Medical Cannabis Stocks? * 7 Strong Buy Stocks With Over 20% Upside * 7 Reasons Stock Buybacks Should Be Illegal Compare Brokers The post Nvidia Reaction Speaks Volumes -- Here's How To Trade It appeared first on InvestorPlace.
The rally since the December lows has certainly been impressive. But as for Netflix (NASDAQ:NFLX), it has made this bull move look kind of tame. Since late December, the shares have soared from $234 to $360 -- or about 53%.Source: Netflix Now, NFLX stock has a pretty good track record anyway. Consider that for the past decade the average annual return has been a blistering 51.8%!This really goes to how important major changes can be with large markets. It's essentially about the innovator's dilemma -- a concept developed by Harvard professor and entrepreneur Clayton Christensen in the 1990s -- where the incumbents cannot react quickly enough. The main reason is fear of cannibalizing the existing business.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut this can prove fatal. Over the years, we've seen how industries can be disrupted, such as with Amazon.com (NASDAQ:AMZN) in e-commerce, Uber with the taxi cab business and Salesforce.com (NYSE:CRM) with enterprise software.With Netflix stock, the main catalysts for the disruption opportunity have been the availability of high-speed internet access and pervasiveness of smartphones. But there has also been a move towards affordable subscriptions. The result is a secular change in how people consume entertainment content. * 10 Hot Stocks Leading the Market's Blitz Higher The trend is clearly evident with cord-cutting. According to research from eMarketer, about 50 million Americans will abandon cable and satellite TV by 2021, up from 20 million this year.By being a first mover, Netflix has some significant competitive advantages that should last for quite some time. The company's name has become of top-of-mind for streaming. The company also has a lead in critical areas like AI, which has allowed for more effective content creation. And yes, there is the scale of the user base. There are currently about 139 million subscribers across 190 countries. In other words, Netflix is winning the "land grab" of the streaming opportunity.To put things into perspective, look at some of the findings from Lab42, a market research firm. About 89% of streaming subscribers are customers of Netflix and the renewal rate is 93%. By comparison, AMZN's is at 75% and Hulu's is 64%.With high levels of customer loyalty, NFLX has been able to build a substantial recurring revenue stream. It also means the company is in a position to periodically increase the pricing. Bottom Line On Netflix StockNo doubt, there are notable risk factors for Netflix stock. The competitive environment is getting more intense. Some of the rivals include Disney (NYSE:DIS), CBS (NYSE:CBS), Amazon, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Apple (NASDAQ:AAPL).Although, interestingly enough, the most recent Netflix shareholder letter notes that the wildly popular game, Fortnite, is much more of a competitor! The reason is that it is essentially a big draw on people's attention.Another nagging issue is that content development can be dicey. Even with the power of analytics, there could still be a string of flops. Zynga (NASDAQ:ZNGA) is definitely an example of this. Despite having a large user base and large amounts of data, it has had a tough time creating engaging new titles.But for NFLX, there are few signs that the company is losing its touch in creating standout content. For example, its movie Bird Box has been streamed in 80 million homes.True, Netflix stock is far from cheap, with the forward price-to-earnings ratio at 54X. But then again, as we've seen over the years, this hasn't been much of a factor anyway, especially as the company should remain a leader in the disruption of the entertainment market.Tom Taulli is the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * Should You Buy, Sell, Or Hold These 7 Medical Cannabis Stocks? * 7 Strong Buy Stocks With Over 20% Upside * 7 Reasons Stock Buybacks Should Be Illegal Compare Brokers The post Netflix Stock Is All About The Innovatoras Dilemma appeared first on InvestorPlace.
Prominent hedge fund managers sold out of Chinese technology stocks and dumped Silicon Valley majors such as Apple Inc and Facebook Inc while global stock markets cratered during the fourth quarter, according to securities filings released on Thursday. Activist hedge fund Jana Partners sold out of its position in major Chinese e-commerce company Alibaba Group Holding Ltd and reduced its stake in Apple by approximately 175,000 shares, slicing its position in the company by 63 percent. Warren Buffett's Berkshire Hathaway Inc shrank its Apple stake to 249.6 million shares from 252.5 million shares in the fourth quarter.
The new CEO of the Cupertino customer relationship software business previously ran two other Accel-KKR portfolio companies that the private equity firm sold in 2017 and 2018.
IQVIA (IQV) delivered earnings and revenue surprises of 2.04% and 2.75%, respectively, for the quarter ended December 2018. Do the numbers hold clues to what lies ahead for the stock?
Cisco Systems (CSCO) gains from strength in Security and Applications segment. Order strength and improving traction of the subscription-based model were other tailwinds.
Groupon (GRPN) hurt by lower customer traffic. However, investments in scaling Groupon+ and maximization of long-term gross profit are a positive.
The Danbury, Connecticut-based company said it had profit of 34 cents per share. Earnings, adjusted for one-time gains and costs, came to $1.50 per share. The results exceeded Wall Street expectations. ...
President Donald Trump signed an executive order in July creating the 25-member board, co-chaired by adviser Ivanka Trump and Commerce Secretary Wilbur Ross, to address workforce issues including "automation, and artificial intelligence that is shaping many industries." Other chief executives joining the board are those of Lockheed Martin Corp, Siemens USA, Home Depot Inc and Visa Inc.
Insperity's (NSP) fourth-quarter 2018 results benefit from worksite employee growth and effective management of pricing, direct cost programs and operating costs.
Sanofi (SNY) and Regeneron (REGN) announce a 60% cut in the U.S. list price of their cholesterol lowering drug, Praluent to improve access and affordability of the product.
The case for insurer UnitedHealth Group (NYSE:UNH) seems almost too easy to make. UNH stock already has been one of the best performers in the market, rising 270% over the past five years. Earnings are expected to grow about 13% in 2019. Yet UnitedHealth stock trades at a seemingly attractive 18x multiple to this year's EPS guidance.With a 10% pullback from early December highs, a cheaper price seems to set up an attractive opportunity. UNH's recent performance and huge earnings growth speak well of management. The company's Optum unit is cutting-edge, and growing revenue while expanding margins. With $226 billion in revenue, meanwhile, UnitedHealth has the scale to serve customers and the size to pressure suppliers.All else equal, I'd expect UnitedHealth stock to keep climbing. Indeed, I recommended UNH a year ago, and even ~15% higher, I'm still bullish. But there are risks here, highlighted by near-term trading in UnitedHealth stock. And investors need to understand those risks before proceeding.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 9 U.S. Stocks That Are Coming to Life Again The Case for UnitedHealth StockThis simply seems like a good business. Growth has been phenomenal. The midpoint of 2019 EPS guidance of $14.40-$14.70 suggests a 155% increase from 2014 levels.Obviously, a lower tax rate and acquisitions have provided some outside help. But this is a company operating well, with revenue and margins both rising.UNH has a diversified portfolio, too. It has its hands in seemingly every market, with the insurer serving employers, individuals, Medicare, and state and local governments. The Global segment, built through targeted M&A, is now a $10 billion-plus revenue business.And Optum is at the forefront of changes in the industry. 2018 revenue rose double-digits, and operating margins continued to expand. Other PBMs (pharmacy benefit managers) are struggling. Rite Aid (NYSE:RAD) unit EnvisionRx has disappointed. Express Scripts managed to sell itself to Cigna (NYSE:CI), but at only a modest premium to 2015 highs. In that context, Optum's performance is even more impressive.This seems simply like a very attractive business. It's the largest health insurer in the world. Optum remains a roaring success. And yet UNH stock isn't that expensive, trading at less than 18x the midpoint of FY19 EPS guidance.Double-digit annual EPS growth, a 1.4% dividend and potentially a higher multiple over time mean UnitedHealth could return 10%+ annually for years to come. The Two Key Risks to UNH StockThere are two key risks, however. The first is that competitors are trying to gain scale themselves and expand their reach. Cigna bought out Express Scripts. CVS (NYSE:CVS) acquired Aetna. Rivals are coming after UnitedHealth's market lead.To be fair, larger mergers haven't played out. Cigna and Anthem (NYSE:ANTM) planned to merge back in 2017, but called it off. Aetna and Humana (NYSE:HUM) did the same. But competitors are trying to copy at least some of UnitedHealth's strategy, and their success could make them more formidable foes.The bigger risk is on the political front. UNH stock has struggled in recent sessions after the Trump Administration announced a plan to end drug rebates (which benefit PBMs like Optum). An apparently ham-handed response from Optum, which asked for 21 month's notice of any changes from drug manufacturers, brought some unwanted publicity, and framed Optum as potentially part of the problem - not the solution.From a long term standpoint, UnitedHealth almost certainly can adapt to any changes. But with net margins only just above 5%, even modest pressure on pricing, reimbursements, or other areas of the business can have a big impact on overall profits. And in the short-term, noise around regulatory changes could impact UnitedHealth stock, as appears to have been the case of late. A Matter of TrustAt these levels, at least some of the risks are priced in. And I'd be loath to put too much faith in the federal government, in particular, doing anything to notably change the healthcare model in the U.S.But that could change. A scenario where a Democratic candidate wins the Presidency in 2020 and is backed by a Democratic Congress is far from impossible. Should such a scenario seem plausible next year, UNH stock could start pricing in that risk.Right now, 18x earnings might seem cheap but it's not hard to picture UNH trading at 13-14x (or even worse) if investors believe regulators are coming for the company's margins.The changing political landscape and UnitedHealth's exposure to that landscape, mean this isn't a set-it-and-forget-it stock. Investors need to understand the risks and be willing to be nimble if political risk, in particular, starts to creep up.In the meantime, however, the pullback in UNH stock makes an attractive business available at an enviable price. And that's enough to make UNH a buy - at least for now.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 7 Best Video Game Stocks to Power Up Your Portfolio! * 7 Forever Stocks to Buy for Long-Term Gains * 5 Self-Driving Car Stocks to Buy Compare Brokers The post UnitedHealth Stock Is a Buy, but Keep an Eye on the External Risks appeared first on InvestorPlace.
Akamai (AKAM) benefited from robust performance of cloud security business, growth in Media and Carrier Division, strong seasonal traffic and operational efficiency.
IPG Photonics (IPGP) benefits from growth in communications, medical and government applications. However, weakness in 3D printing and metal cutting remains a concern.
Kraft Heinz's (KHC) cost-saving endeavors, and focus on innovation and marketing are likely to help the company counter input cost woes in Q4.
In the latest trading session, Salesforce.com (CRM) closed at $162.79, marking a +1.8% move from the previous day.