Given that it’s officially the heart of tech season, it’s not surprising that many tech heavyweights are trending on Friday following the release of their financial reports.
Amid the stocks that are in the spotlight today are Amazon.com, Inc. (NASDAQ:AMZN), Tyco International plc (Ireland) Ordinary Share (NYSE:TYC), Alphabet Inc (NASDAQ:GOOG), CIGNA Corporation (NYSE:CI), and Yamana Gold Inc. (USA) (NYSE:AUY). Let’s take a closer look at their performance in the last quarter and see how these stocks are positioned for the long-run, based on the hedge fund sentiment towards them.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. 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).
Amazon Delivers Solid Quarter
E-commerce giant Amazon.com, Inc. (NASDAQ:AMZN) beat both top and bottom line estimates for the last quarter again, with second-quarter EPS of $1.78 on sales of $30.4 billion. Analysts were expecting EPS of $1.11 and revenue of $29.54 billion. Sales advanced by 31.1% year-over-year, powered by Amazon Prime and Amazon Web Services, the latter of which saw sales jump by 58% year-over-year to $2.88 billion. For the third quarter, Amazon anticipates sales in the range of $31 billion to $33.5 billion and operating income between $50 million and $650 million, compared to $1.30 billion in the second quarter and $406 million registered in the third quarter of 2015. Andreas Halvorsen’s Viking Global was one of the top holders of Amazon.com, Inc. (NASDAQ:AMZN) at the end of the first quarter, with a stake of over 3.4 million shares.
Tyco Beats Estimates
Tyco International plc (Ireland) Ordinary Share (NYSE:TYC) earned $0.54 on sales of $2.45 billion in its fiscal third quarter, beating the consensus estimates by $0.01 per share and $10 million, respectively. The strong dollar weighed on Tyco’s results as foreign exchange caused total sales to fall by 2% year-over-year despite organic revenue inching up by 1.5%. Cash from operating activities came in at $191 million while free cash flow was $119 million. In terms of guidance, management is confident that the company will realize $1 billion of savings related to previously announced merger synergies and productivity initiatives. Among the funds we track, 26 funds owned $610.45 million worth of Tyco International plc (Ireland) Ordinary Share (NYSE:TYC)’s stock, which accounted for 3.90% of the float on March 31, versus 27 funds and $804.69 million, respectively, a quarter earlier.
On the next page, we examine Alphabet, CIGNA Corporation, and Yamana Gold.