On the last full trading day before Christmas, shares of Micron Technology, Inc. (NASDAQ:MU), Nike Inc (NYSE:NKE), Lindsay Corporation (NYSE:LNN), and Bed Bath & Beyond Inc. (NASDAQ:BBBY) are each trending on the back of financial results and/or guidance updates. Let’s take a closer look.
In addition, let’s analyze hedge fund sentiment towards some of these stocks. In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8000 funds in operation at present, Hedge fund experts at Insider Monkey look at the aristocrats of this group, around 730 funds. Contrary to popular belief Insider Monkey’s research revealed that hedge funds underperformed in recent years because of their short positions as well as the huge fees that they charge. Hedge funds managed to outperform the market on the long side of their portfolio. In fact, the 15 most popular small-cap stocks among hedge funds returned 102% since the end of August 2012 and beat the S&P 500 Index by 53 percentage points (see the details here).
Shareholders of Micron Technology, Inc. (NASDAQ:MU) received some coal in their stockings yesterday after the semiconductor company reported its latest earnings results. For the first quarter of fiscal 2016, Micron posted earnings of $0.24 per share on revenue of $3.35 billion, exceeding EPS estimates by $0.01 but missing revenue expectations by $110 million. Due to oversupply and increased competition, Micron’s gross margin shrank by 2.0 percentage points quarter-over-quarter to 25% and its outlook is a little disappointing with management expecting a second quarter loss of $0.05 to $0.12 per share and gross margin of 17-20%, substantially below analyst earnings estimates of $0.22 per share and first quarter’s 25% gross margin. Hedge fund sentiment towards Micron Technology, Inc. (NASDAQ:MU) is mildly bearish, with the number of funds with long positions in the company falling by eight to 71 during the third quarter. Shares of Micron are off by 6.5% in the first hour of trading.
Nike Inc (NYSE:NKE) continued its streak of bottom-line earnings beats yesterday and shares of the athletic apparel maker are now at an all-time high of over $135 per share. For its second fiscal quarter, Nike reported earnings of $0.90 per share, beating estimates by $0.04 per share, and sales of $7.69 billion, up by 4.2% year-over-year. Gross margin rose by 0.5 percentage points from this time in 2014, powered by higher selling prices as well as contained costs. Most encouragingly, Nike’s future demand is strong, with management announcing that the company’s worldwide futures orders were up by 15% year-over-year on a dollar basis and up 20% on a constant currency basis. Among the 59 elite funds that owned shares of Nike Inc (NYSE:NKE) is Stephen Mandel’s Lone Pine Capital with a holding of 5.7 million shares as of the end of September.
On the next page, we examine Lindsay Corporation, and Bed Bath & Beyond Inc.