Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Hedge Funds Right About Sonoco Products Company (SON) As Slide Continues Following Earnings Miss

Page 1 of 2

Shares of Sonoco Products Company (NYSE:SON) are trading down by 3.29% following the release of the company’s second quarter financial results, which missed on both the top and bottom line estimates. While the EPS of $0.66 was $0.01 lower than expectations, revenues of $1.25 billion came in $40 million lighter than what analysts anticipated. Even though the operating profit from the Consumer Packaging segment grew by 33% during the quarter, it was more than offset by higher labor, pension, maintenance and other operating costs. Sales from the Paper and Industrial Converted Products segment declined by 8% on a year-over-year basis to $449 million. The company’s guidance range for its third quarter EPS also came in lower than the $0.72 mark that analysts had previously expected the company to hit, with the company projecting earnings per share of $0.65 to $0.70. Consequently, the full year outlook also fell to between a range of $2.48-$2.58, from a range from $2.60-$2.70.

Sonoco Products Company (NYSE:SON)

Hedge funds had a bearish outlook towards Sonoco Products Company (NYSE:SON) during the first quarter, with the smart money seeming to collectively anticipate a rougher ride forthcoming for the company’s shares. Among the funds that we track, a total of 17 firms had about $60.05 million in shares of the company at the end of March, compared to 20 funds with $74.99 million in holdings one quarter earlier. The flight of capital from the company was even higher than what these figures suggest if we factor in the 4.42% appreciation in the stock price during the first quarter, and amount to an over 20% flight of capital from the stock. Shares are now down by just under 7% since the end of the first quarter.

We pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular stock picks in real time since the end of August 2012. These stocks have returned 139% since then and outperformed the S&P 500 Index by around 81 percentage points (see the details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.

As far as the insider activity surrounding Sonoco Products Company (NYSE:SON) is concerned, there has been one insider purchase, by Director Marc Oken in February, to the tune of 2,000 shares, while the most prominent insider sale was by CFO Barry Saunders, who disposed of 13,666 shares in the same month. It is worthwhile to note that insider purchases are a much stronger indicator than insider sales.

Let us take a closer look at the hedge fund activity in Sonoco Products Company (NYSE:SON), before we pass a verdict on the company.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!