Crude futures are in the green today after yesterday’s API report showed a surprise draw in inventories. Not surprisingly, the major index futures are also in the green as earnings reports from various companies trickle in.
Given that it’s the middle of earnings season, let’s examine more in depth the latest quarterly results of Morgan Stanley (NYSE:MS), U.S. Bancorp (NYSE:USB), Halliburton Company (NYSE:HAL), Canadian Pacific Railway Limited (USA) (NYSE:CP), and SUPERVALU INC. (NYSE:SVU). In addition, we are going to take a closer look at the hedge fund sentiment surrounding each stock to get some perspective on their long-term performance.
While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).
Given that most of its peers have reported solid results, Morgan Stanley (NYSE:MS) didn’t catch many investors by surprise after the bank reported excellent results of its own, powered in part due to robust trading activity. For its third quarter, the investment bank earned $0.81 per share, beating the Street by $0.18 per share. Revenue was $8.91 billion, up 21.6% year-over-year, and $740 million ahead of the average analyst estimate. Book value came in at $37.11 per share while tangible book value was $32.13. The company remains on track to deliver around $1 billion of cost cuts by the end of next calendar year. Ken Fisher‘s Fisher Asset Management boosted its stake in Morgan Stanley (NYSE:MS) by 657% to 2.35 million shares during the third quarter.
Traders are watching U.S. Bancorp (NYSE:USB) after the bank reported in-line third-quarter EPS of $0.84 on sales of $5.39 billion, which were $40 million higher than the consensus estimate. Return on average assets for the time period came in at 1.36% and average common equity was 13.5%. Management returned 79% of the bank’s earnings through buybacks and dividends. Average total loans grew by an adjusted 6.4% year-over-year and net interest margin was 2.98%, down by 6.0 basis points from the third quarter of 2015. Of the around 749 top funds Insider Monkey tracks, 48 funds owned $5 billion worth of U.S. Bancorp (NYSE:USB)’s stock, which accounted for 7.20% of the float on June 30, up slightly from 47 funds and $4.91 billion respectively on March 31.
On the next page, we will take a closer look at the earnings results of Halliburton Company, Canadian Pacific Railway, and SUPERVALU.