This content is from: Portfolio

Morning Brief: Wall Street Lifts Target Prices for Two Popular Hedge Fund Stocks

Amazon and Microsoft impressed analysts with their most recent quarterly results.

  • By Stephen Taub

Amazon.com is the latest FANG stock and hedge fund favorite to surge in price after posting quarterly results that beat expectations. The e-commerce pioneer rose 3.6 percent on Friday, to close at $1,572.62, after hitting a record high during the trading session. On Friday morning UBS raised its price target from $1,760 to $1,830 and maintained its buy rating, while Credit Suisse lifted its price target from $1,800 to $1,950, citing an increase in its media subscription, advertising, and AWS (cloud computing) revenue. “We have now entered a relative harvest cycle,” Credit Suisse proclaimed in a note to clients. It pointed out that all reporting revenue lines showed outperformance. Amazon was the fourth-most widely held stock among hedge funds at year-end. David Einhorn’s Greenlight Capital is also famously short the stock.

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Shares of Microsoft, the second-most-popular stock among hedge funds at yearend, jumped 1.65 percent, to close at $95.82, after the software and cloud computing giant reported very strong quarterly results. On Friday, Barclays lifted its price target on the stock from $100 to $108 and maintained its overweight rating. It pointed out that all three of the company’s segments posted double-digit growth in the recent period. “Microsoft is becoming a predictable growth story that will continue to provide positive estimate revisions,” it stated in a note to clients. “Hence, we think that MSFT should remain a core name for investors looking at multi-year top-line growth and margin expansion stories.”

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JANA Partners cut its stake in Bloomin’ Brands to 2.6 percent. In a regulatory filing, the activist firm headed by Barry Rosenstein said it sold the shares “through regular portfolio management activities.” It added that it “appreciates the constructive dialogue” it has had with the board of directors and management and their commitment to creating shareholder value. Earlier this month the casual dining company best known for its Outback Steakhouse chain announced that it agreed to add Wendy Beck, a veteran finance executive with more than 25 years of experience, as a new independent director as part of an agreement with JANA. The hedge fund firm also agreed to customary standstill and voting commitments.

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Pershing Square Holdings is up 4.2 percent this month through April 26, cutting its loss for the year to 4.7 percent. It has benefitted, in part, from Chipotle Mexican Grill, whose stock is up about 48 percent for the year.

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