After having opened close to flat, all three major indexes are in the red as traders weigh in the effect of a potentially stronger dollar due to the upcoming interest rate hikes over the next four quarters.
In this article, we find out why Abercrombie & Fitch Co. (NYSE:ANF), G-III Apparel Group, Ltd. (NASDAQ:GIII), Potash Corporation of Saskatchewan (USA) (NYSE:POT), Agrium Inc. (USA) (NYSE:AGU), and Micron Technology, Inc. (NASDAQ:MU) are making headlines today. In addition, we are going to assess the hedge fund sentiment towards each stock.
At Insider Monkey, we track around 750 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details here).
Abercrombie Misses Estimates
Abercrombie & Fitch Co. (NYSE:ANF) shares are 18% in the red today after the retailer reported a loss of $0.25 per share for its second quarter, missing the consensus estimate by $0.05 per share. Revenue for the time period was $783.2 million, down by 4.2% year-over-year due to a 4% decline in same-store sales. The outlook is also disappointing, as Abercrombie & Fitch’s management expects comparable sales to remain challenging for the second half of the year due to traffic weakness in domestic malls and lower tourism caused in part to the strong dollar. Of the around 750 elite funds we track, 30 funds had a bullish position in Abercrombie & Fitch Co. (NYSE:ANF) at the end of June, down by one from the previous quarter.
G-III Reports Earnings
G-III Apparel Group, Ltd. (NASDAQ:GIII) lost $0.03 per share on revenue of $442.3 million in its second quarter, down markedly from $0.27 in EPS and $473.9 million in sales reported for the same period of the last year. Sales fell by 7% year-over-year and gross margin inched lower by 30 basis points as softness continued in the retail outlet environment. Similar to Abercrombie, G-III’s outlook is a little disappointing. The company’s management expects full fiscal year earnings of $2.16 to $2.26 per share, versus the previous range of $2.55 to $2.65, while revenue is seen coming in at $2.48 billion, down from the previous $2.56 billion. David Keidan‘s Buckingham Capital Management raised its stake in G-III Apparel Group, Ltd. (NASDAQ:GIII) by 26% to 763,624 shares during the second quarter.
On the next page, we examine Potash Corporation of Saskatchewan, Agrium, and Micron Technology.