A Look At Four Stocks Moving On Earnings Reports

The US Stock Market inched down on Thursday following the Fed’s decision to raise interest rates. Nevertheless, several stocks are taking their course being affected not as much as the overall sentiment, but on the back of their financial results reported for the last quarter. Thefore, in this article, we’ll take a look at FedEx Corporation (NYSE:FDX), Oracle Corporation (NYSE:ORCL), General Mills, Inc. (NYSE:GIS) and Accenture Plc (NYSE:ACN). Aside from the financial results that affected their moves, we are also going to assess the hedge fund sentiment towards these stocks.

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 small-cap stock picks in real time since the end of August 2012. These stocks have returned 102% since then and outperformed the S&P 500 Index by around 53 percentage points (see more details here). That’s why we believe it is important to pay attention to the hedge fund sentiment; we also don’t like paying huge fees.

The first on the list is FedEx Corporation (NYSE:FDX), whose shares have opened nearly 4% higher on the back of the company posting its financial results for the second quarter of its fiscal 2016. For the quarter ended November 30, FedEx reported revenue of $12.5 billion, up by 4.7% year-on-year, while its earnings advanced by an annual 20.6% to $2.58 per share. Moreover, both exceeded the analysts’ EPS and revenue estimates by $0.07 and $50 million, respectively. However, the company has registered declines in two segments. The Express segment revenue plummeted by 6% on the year to $6.59 billion, while the freight segment revenue fell by 2% to $1.55 billion in the trimester. Nonetheless, the ground segment revenue surged by 32% to $4.05 billion. For fiscal 2016, the company forecasts EPS in the range of $10.40 to $10.90 in range with the Street’s expectations of $10.52.

Our data show that 53 funds in our database were long FedEx Corporation (NYSE:FDX) at the end of the third quarter, up from 52 funds that owned the stock at the end of the second quarter. Together, they hold some 10.2% of the company’s common stock, while Mason Hawkins ‘s Southeastern Asset Management is the largest shareholder owning 6.40 million shares valued at $919.5 million as of the end of September.

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Oracle Corporation (NYSE:ORCL)’s stock opened lower, offsetting the gains of the previous days. Oracle stock has declined by roughly 4% after the company reported second-quarter fiscal 2016 EPS of $0.59 on revenue of almost $9.0 billion, beating profit estimates by $0.03 per share, but missing revenue expectations by $70 million. Oracle’s revenue weakened by 6.3% year-over-year and its Non-GAAP operating margin fell by 4.31 percentage points to 41%. Management expects third quarter fiscal 2016 revenue growth of up to 3% and EPS to be between $0.63 and $0.66. Moreover, the company announced its regular $0.15 dividend, which gives its stock a yield of 1.6%.

Among the funds we track, Oracle Corporation (NYSE:ORCL) lost some popularity during the third quarter, with a total of 57 funds reporting long positions in the company, versus 58 funds a quarter earlier. However, these funds amassed just 4.7% of the company’s outstanding stock heading into the fourth quarter. Boykin Curry ‘s Eagle Capital Management is the largest shareholder of Oracle among the investors we follow. The fund increased its stake in the company by 4% during the third quarter to 43.6 million shares valued at $1.57 billion.

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Next on our list is General Mills, Inc. (NYSE:GIS), whose stock is off by 3.9% after the company reported second-quarter EPS of $0.82 on revenue of $4.42 billion, missing profit estimates by $0.01 per share and revenue expectations by $190 million. Guidance is lower with General Mills now expecting growth in earnings lower than previously estimated.

Despite today’s decline, hedge funds have been optimistic on the stock, with 30 hedge funds owning shares in Q3, up from the 27 funds a quarter earlier. Mario Gabelli‘s GAMCO Investors cut its stake by 4% in the quarter to 2.48 million shares worth $139.2 million, as reported in its latest 13F filing.

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Completing our list is Accenture Plc (NYSE:ACN)’s stock has plunged by more than 3% so far today after the company reported first quarter fiscal 2016 EPS of $1.28 on revenue of $8.01 billion. Although revenue exceeded analyst estimates by $90 million, Accenture’s EPS missed expectations by $0.04. Also, the company has revised its fiscal year 2016 revenue growth expectations to the range of 6% to 9%, having increased both ends of the range by 100 basis points. Furthermore, management reaffirmed its full fiscal year EPS guidance of $5.09 to $5.24 per share.

Among the funds we track, the number of investors in Accenture Plc (NYSE:ACN) remained unchanged at 37 during the third quarter. Together, they hold some 1.8% of the company’s common stock. Alex Snow ‘s Lansdowne Partners is the largest holder of Accenture Plc (NYSE:ACN) stock at the end of the quarter among the funds we follow. In its latest 13F filing, Lansdowne Partners reported 5.4 million shares valued at $530.65 million.

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Disclosure: none.