The markets are relatively calm this morning, although the major indexes are slightly in the red.
In this article, we examine five companies that just reported earnings, American Campus Communities, Inc. (NYSE:ACC), AvalonBay Communities Inc (NYSE:AVB), Cadence Design Systems Inc (NASDAQ:CDNS), Texas Instruments Incorporated (NASDAQ:TXN), and Express Scripts Holding Company (NASDAQ:ESRX). In addition, we are going to take a look at the data from the previous round of 13F filings to get an idea what smart money investors think about the companies in question.
Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 700 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).
FFO Beat at American
American Campus Communities, Inc. (NYSE:ACC) is in the spotlight after the company reported a solid second quarter, with funds from operation (FFO) of $0.54 per share and revenue of $174.68 million. Analysts were expecting FFO of $0.52 per share and revenue of $174.92 million, respectively, for the same time period. Same store wholly-owned NOI rose by 2.5% year-over-year, while occupancy inched lower by 40 basis points to 92.6%. For full 2016, American Campus Communities’ management anticipates FFO to be in the range of $2.25 to $2.36 per fully diluted share, and FFOM to be in the range of $2.19 to $2.31 per fully diluted share. During the first quarter, Jim Simons’ Renaissance Technologies raised its stake by 48% in American Campus Communities, Inc. (NYSE:ACC) to almost 800,000 shares.
AvalonBay Reports Results
AvalonBay Communities Inc (NYSE:AVB) reported diluted FFO of $1.99 per share for the three months ended in June 30, down 8.7% year-over-year from last year’s $2.18 per share and below management’s previous guidance of $2.10 per share. Core FFO per share went up by 8.6% year-over-year to $2.03 per share. The core FFO results were ahead of previous guidance of $2 per share in April. Part of the reason for the core FFO beat was because NOI increased by 5% year-over-year, powered by a 5.2% rise in average rent. In terms of guidance, management anticipates between $8.26 and $8.46 in FFO per share for 2016 and $8.13 to $8.33 in core FFO. The number of funds from our database with holdings in AvalonBay Communities Inc (NYSE:AVB) fell by two quarter-over-quarter to 18 at the end of the first quarter.
On the next page, we examine Cadence Design Systems, Texas Instruments, and Express Scripts Holding Company.