Markets inched up higher on Monday and the S&P 500 reached a new lifetime high, although oil continues to lose ground.
Meanwhile, investors are closely watching Verizon Communications Inc. (NYSE:VZ), FleetMatics Group PLC (NYSE:FLTX), First Data Corp (NYSE:FDC), BroadSoft Inc (NASDAQ:BSFT), and Insperity Inc (NYSE:NSP). In this article, we are going to take a closer look at the news that put these stocks in the spotlight and analyze the hedge fund sentiment towards them.
An everyday investor doesn’t have the same resources and capabilities to analyze different publicly-traded companies as hedge funds do. This is why it is a good idea to see what stocks hedge funds like the most and try to imitate some of their bullish moves in an attempt to reap market-beating returns. At Insider Monkey, we follow the activity of several hundred of the best-performing hedge funds as part of our strategy. We analyze their 13F filings and use the data to see what stocks they are collectively bullish on. Through extensive research, we have determined that the best approach to outperform the broader indices is to follow hedge funds into their top small-cap ideas. In our backtests, a portfolio of the 15 most popular small-cap stocks generated monthly alpha of 81 basis points, versus 0.7 percentage points posted by hedge funds’ top large- and mega-cap picks (see more details here).
Verizon Communications to Acquire Fleetmatics
Verizon Communications Inc. (NYSE:VZ) and FleetMatics Group PLC (NYSE:FLTX) are making headlines today after Verizon said it will acquire the Dublin-based fleet management company for $60.00 per share in cash, or approximately $2.4 billion. Verizon plans to make Fleetmatics a part of its telematics subsidiary, which focuses on fleet management and mobile workforce solutions. Last month, Verizon’s telematics unit acquired Telogis, a California-based Cloud and Mobile Enterprise Management (MEM) software company. Shares of Verizon have inched down by 0.90% so far today, while FleetMatics Group PLC (NYSE:FLTX)’s stock has skyrocketed by more than 38% on the back of the news. Jim Travers, CEO of FleetMatics, said in a statement that both companies believe that SaaS-based fleet management market is “extraordinarily” large, and that it could be best utilized with the help of quality products and advanced distribution channel. Mr. Travers added that with over 37,000 customers, 737,000 subscribers and a team of 1200 professionals, FleetMatics is excited to join hands with Verizon and plans to become the world’s largest mobile workforce management company. At the end of the first quarter, 61 hedge funds tracked by Insider Monkey held stakes in Verizon Communications Inc. (NYSE:VZ) at the end of March, up from 52 funds a quarter earlier. On the other hand, 12 hedge funds in our data were long FleetMatics Group PLC (NYSE:FLTX).
On the next page, we will discuss First Data, BroadSoft and Insperity.
First Data Corp Beats Second Quarter Estimates
Shares of First Data Corp (NYSE:FDC) opened higher, but has lost some ground since then, even though the company topped analysts’ forecasts for the second quarter. The eCommerce technology company earned $0.35 a share, above the expected $0.34, while revenue amounted to $1.98 billion, better than the consensus estimate of $1.81 billion. First Data Corp’s CEO, Frank Bisignano, said in a press statement that net income growth, healthy margin expansion and strong cash flow drove earnings in the quarter beyond expectations. The company experienced growth in Global Financial Solutions and strong client momentum in the enterprise space. Among the investors in our database, 17 funds owned shares of First Data Corp (NYSE:FDC) at the end of March.
BroadSoft Posts Second Quarter Results
BroadSoft Inc (NASDAQ:BSFT)’s stock has inched down today after the company reported a second-quarter loss of $2.9 million and issued weaker-than-expected guidance for the third quarter. However, adjusted earnings in the quarter were $0.49, better than the analysts’ estimates of $0.36, while $81.7 million in revenue also topped the estimate of $78.99 million. For the third quarter, the Maryland-based software company expects EPS of $0.26 to $0.41, versus the consensus estimate of $0.47, while full-year earnings estimated by the company lie in the range of $1.95 to $2.15 per share. BroadSoft’s CEO Michael Tessler said in a statement that the company is experiencing strong customer growth around the world, and it plans to continue its innovation to remain a leading player in the industry. Dan Friedberg’s Sagard Capital Partners Management Corp was one of 16 funds from our database that held stakes in BroadSoft Inc (NASDAQ:BSFT) at the end of the first quarter.
Insperity Misses Revenue Estimates
Insperity Inc (NYSE:NSP)’s stock has slid by nearly 12% this morning on the back of the company’s second-quarter results. The Houston-based employer organization’s revenue in the quarter was $707.33 million, sharply lower than analysts’ estimates of $720.85 million, while EPS of $0.60 was slightly higher than the expected $0.59. For the third quarter, Insperity expects to earn between $0.72 and $0.78 per share, versus the consensus estimate of $0.73, whereas full-year EPS is expected to be in the range of $3.50 to $3.60. Overall, 19 funds from our database were long Insperity Inc (NYSE:NSP) at the end of the first quarter, down from 25 funds a quarter earlier.