It’s been a pretty ugly day on Wall Street as the Dow Jones is off 440 points, while the S&P 500 is down 2.7%. Traders have been in a dour mood after yesterday’s ‘Brexit’ decision. Although Britain might not officially leave the EU for another two years, the ramifications of the vote could cause a recession in both Britain and the EU.
Among the stocks buzzing admist the sea of red are Finish Line Inc (NASDAQ:FINL), Xerox Corp (NYSE:XRX), QUALCOMM, Inc. (NASDAQ:QCOM), PPL Corp (NYSE:PPL), and Sonic Corporation (NASDAQ:SONC). Let’s take a closer look and find out how elite funds are positioned among the five.
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).
Finish Line Surges on Earnings
Finish Line Inc (NASDAQ:FINL) shares are almost 15% in the green after the company reported solid fiscal first quarter results. In the quarter, Finish Line earned an adjusted $0.23 per share on revenue of $453.52 million, beating the consensus by $0.01 per share and $4.52 million, respectively. Comparable store sales inched up 1.5% year-over-year, while adjusted operating margin inched lower by 180 basis points to 3.3%. Fiscal 2017 guidance is for comparable store sales to rise 3% to 5% percent and for adjusted earnings to come in at $1.50-$1.56 per share. Of the 766 elite funds we track, 16 funds owned $57.06 million worth of Finish Line Inc (NASDAQ:FINL)’s stock, which accounted for 6.10% of the float on March 31, versus 18 funds and $99.67 million, respectively, a quarter earlier.
Xerox Picks a New Future Leader
Xerox Corp (NYSE:XRX) is in the spotlight after the company’s board announced Jeff Jacobson will be the new CEO of Xerox Corporation following the completion of the company’s planned separation into two publicly traded companies by the end of 2016. Jacobson is currently the head executive of Xerox Technology and will replace Ursula Burns. Shares of Xerox are 3% lower today due to broader market weakness. A total of 29 funds tracked by us had a bullish position in Xerox Corp (NYSE:XRX) at the end of March, up by four funds from the previous quarter.
On the next page, we examine QUALCOMM, PPL Corp, and Sonic Corporation.