Why Spectra Energy, Clorox, HollyFrontier and 2 More Are in the Limelight

All three index futures are slightly in the red this morning after North Korea launched a missile into Japanese waters. Although the move is likely just saber-rattling, any escalation between the two countries could cause the market to go into ‘risk-off’ mode.

In this article, we’ll examine the latest quarterly financial results out of five companies, Spectra Energy Corp. (NYSE:SE), RR Donnelley & Sons Co (NASDAQ:RRD), Clorox Co (NYSE:CLX), HollyFrontier Corp (NYSE:HFC), and Vitamin Shoppe Inc (NYSE:VSI) and see what hedge funds think of each stock using SEC filings.

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Spectra Misses the Consensus

Spectra Energy Corp. (NYSE:SE) is in the spotlight today after the company reported second quarter earnings of $0.24 per share on sales of $1.16 billion, missing the consensus marks by $0.03 and $100 million respectively. The company’s execution backlog grew to $10 billion, with $1.8 billion of new demand-pull contracts in the quarter. EBITDA was $655 million for the period, slightly higher than last year’s $652 million. Ongoing distributable cash flow came in at $271 million and management continues to expect full-year dividend coverage of 1.2-times. Jim Simons‘ Renaissance Technologies cut its position in Spectra Energy Corp. (NYSE:SE) by 29% during the first quarter to 765,600 shares as of March 31.

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RR Donnelley & Sons Beats

The second quarter was a solid one for RR Donnelley & Sons Co (NASDAQ:RRD) as the company beat top- and bottom-line estimates with its EPS of $0.34 and revenue of $2.73 billion. Analysts were expecting $0.06 per share and $60 million less, respectively. The company’s guidance was a little mixed however, with management expecting net sales to come in at the low end of its previous guidance of $11.3 billion-to-$11.5 billion for the full year, and for its non-GAAP adjusted EBITDA margin to come in at the high end of its previous outlook of 10.4%-to-10.6%. Management continues to expect free cash flow of $400 million-to-$500 million for the full year. Of the 766 active hedge funds that we track, 22 funds were long RR Donnelley & Sons Co (NASDAQ:RRD) on March 31, owning aggregate positions valued at $127.69 million which accounted for 3.70% of the float on March 31.

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On the next page we’ll find out why Clorox Co, HollyFrontier Corp, and Vitamin Shoppe are in the spotlight this morning.

Clorox Turns in Mixed Quarter

Clorox Co (NYSE:CLX) earned $1.26 per share on sales of $1.6 billion for its fourth quarter of fiscal year 2016, missing the bottom-line consensus estimate by $0.02 per share but beating the top-line target by $20 million. For the full 2016 fiscal year, Clorox earned diluted EPS of $4.92 from continuing operations, up by 8% year-over-year. For fiscal year 2017, management believes sales will increase by 2%-to-4% and EBIT margin will expand by 25-to-50 basis points. Adjusted EPS is expected to come in between $5.38 and $5.58. 29 hedge funds in our system were long Clorox Co (NYSE:CLX) at the end of the first quarter, up by three funds quarter-over-quarter.

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HollyFrontier Earnings Fall Short

In what has been a weak quarter for almost all refiners, HollyFrontier Corp (NYSE:HFC)‘s second quarter was no exception, with the refiner reporting earnings of $0.28 per share versus analysts’ consensus estimate of $0.32 per share. HollyFrontier’s revenue for the time period came in at $2.71 billion, down by 26.8% year-over-year, but still beating estimates by $290 million. On a per produced barrel basis, consolidated refinery gross margin was $8.88 per barrel, down by almost half from the $17.42 figure that it stood at for the second quarter of 2015, as weak benchmark refining margins weighed on results. Soft results aside, there are some firm hedge fund believers in HollyFrontier Corp (NYSE:HFC). Cliff Asness‘ AQR Capital Management was one of them, reporting owning a stake of over 5.5 million shares of the company as of March 31, up by up 42% quarter-over-quarter.

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Vitamin Shoppe in the Spotlight

Traders are watching Vitamin Shoppe Inc (NYSE:VSI) today after the company reported second quarter EPS of $0.55 on sales of $332.72 million. The market was expecting $0.04 per share more in terms of profit and $1.14 million less in terms of revenue. Total comparable sales inched up by 1.6%, while the company’s adjusted operating margin inched lower by 130 basis points to 7.2%. For the full year, management sees flat-to-slightly-negative total comparable-sales and adjusted earnings per share of between $2.10 and $2.30. The number of top funds in our database that had holdings in Vitamin Shoppe Inc (NYSE:VSI) as of March 31 stood at 16, up by one quarter-over-quarter.

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