Amid an Increase in Consumer Spending, This Is How Hedge Fund’s Favorite Consumer Stocks Performed in Q2

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#3. Nike Inc (NYSE:NKE)

 – Hedge Funds with Long Positions (as of March 31): 64

 – Aggregate Value of Hedge Funds’ Holdings (as of March 31): $3.65 Billion

Moving on, shares of Nike Inc (NYSE:NKE) saw a gradual decline during the second quarter, losing over 10% of their value during the period. The company reported its fourth quarter of fiscal year 2016 results at the end of June, declaring EPS of $0.49 on revenue of $8.28 billion, narrowly topping analysts’ estimates of EPS of $0.48 on revenue of $8.24 billion. Analysts continue to remain bullish on the company, citing the stellar organic growth it has displayed over the years and the huge investment it’s making in e-commerce, which they believe will reap rich dividends in the future. On July 5, analysts at Nomura reiterated their ‘Buy’ rating on the stock and set a price target of $64 on it, which represents potential upside of 15.56%. Stephen Mandel‘s Lone Pine Capital increased its stake in Nike Inc (NYSE:NKE) by 5% to almost 12 million shares during the first quarter.

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#2. PepsiCo, Inc. (NYSE:PEP)

 – Hedge Funds with Long Positions (as of March 31): 65

 – Aggregate Value of Hedge Funds’ Holdings (as of March 31): $6 Billion

The aggregate ownership of PepsiCo, Inc. (NYSE:PEP) among the hedge funds that we track rose by seven during the first quarter, though the aggregate value of their Pepsi holdings declined by $1.7 billion. During the second quarter, shares of the beverage giant remained largely range-bound, ending the quarter up by 3.38% and very close to their lifetime high of $106.98. In the past few quarters, several states and other jurisdictions have contemplated imposing a soda tax on the sale of aerated beverages, which has been strongly opposed by the beverage industry. Although analysts believe that these taxes will be detrimental for companies like PepsiCo, Inc. (NYSE:PEP) and The Coca-Cola Co, shares of these companies haven’t been impacted much by the possibility. Pepsi is expected to report its second quarter results by the end of this week and the consensus among analysts is for it to report EPS of $1.30 on revenue of $15.37 billion. For the same quarter of last year, Pepsi reported EPS of $1.32 on revenue of $15.92 billion.

#1. Constellation Brands, Inc. (NYSE:STZ)

 – Hedge Funds with Long Positions (as of March 31): 71

 – Aggregate Value of Hedge Funds’ Holdings (as of March 31): $5.73 Billion

Constellation Brands, Inc. (NYSE:STZ) is another consumer stock that is currently trading very close to its lifetime high. Owing to the rally they enjoyed in anticipation of the company’s first quarter of fiscal year 2017 earnings, which were released on June 30, shares of Constellation Brands, Inc. (NYSE:STZ) ended the second quarter up by 9.47%. In April, Morgan Stanley released a list of 30 stocks for investors to buy and hold until 2019, which included Constellation Brands. For its fiscal first quarter, the alcoholic beverages company reported EPS of $1.57 on revenue of $1.87 billion, exhibiting strong growth from the EPS of $1.26 and revenue of $1.63 billion that it delivered for the same quarter of fiscal year 2016.

Following the latest earnings release, several analysts reiterated their ratings and price targets on the stock. Constellation Brands’ stock currently sports an average rating of ‘Overweight’ and an average price target of $175.65 from the 20 leading analysts and research firms on Wall Street who track it. During the first quarter, the number of hedge funds in our system long the stock increased by four, while the aggregate value of their Constellation Brands holdings rose by $75 million. Billionaire Dan Loeb‘s Third Point was one of the hedge funds that increased its stake in the company during the quarter, by 11% to 1.76 million shares.

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Disclosure: None

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