IHS Inc. (NYSE:IHS) and SYNNEX Corporation (NYSE:SNX) are trending after reporting earnings earlier today. Let’s take a closer look at the financial results of both companies and see how the world’s greatest investors view them.
In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8,000 funds in operation at present, Hedge fund experts at Insider Monkey look at the aristocrats of this group, around 700 funds. Contrary to popular belief Insider Monkey’s research revealed that hedge funds have lagged in recent years because of their short positions as well as the huge fees that they charge. Hedge funds managed to outperform the market on the long side of their portfolio. In fact, the 15 most popular small-cap stocks among hedge funds returned 118% since the end of August 2012 and beat the S&P 500 Index by 60 percentage points (see the details here).
Follow Ihs Inc. (NYSE:IHS)
Follow Ihs Inc. (NYSE:IHS)
Analytics and market research company IHS Inc. (NYSE:IHS) beat expectations in its third-quarter report, with an EPS of $1.56 and revenue of $587.95 million, versus expectations of $1.47 in EPS and revenue of $579.07 million. Organic revenue grew by 3% year-over-year, while revenue grew 6% year over year. Adjusted EPS rose by 5% on the year and adjusted EBITDA increased by 9% to $190 million.
“We continue to be pleased with the strength of our Industrials revenue growth, while our Resources revenue continues to be negatively impacted by market pressures. We continue to deliver solid profit and margin expansion, with Adjusted EBITDA of $190 million for the quarter, up 9 percent versus a year ago,” Todd Hyatt, IHS Chief Financial Officer, said in a statement.
IHS’s outlook for the fiscal year ending November 30 is for revenue to come in at the midpoint of the range between $2.3 billion and $2.34 billion and for total organic growth to be around 1%-2%. The company expects adjusted EBITDA to be in the high end of the range between $725 million and $740 million and adjusted EPS to be in the upper end of the range between $5.80 and $6 per diluted share.
Hedge funds are cautious towards IHS Inc. (NYSE:IHS). A total of 19 hedge funds owned $985.18 million of the company’s shares (representing 11.20% of the float) on June 30, versus 26 funds and $1.02 billion respectively on March 31. Matthew A. Weatherbie’s Weatherbie Capital decreased its stake by 20% on the quarter to 222,934 shares, while Mick Hellman’s Hmi Capital cut its stake by 28% to 163,847 shares. On the other hand, James Crichton’s Hitchwood Capital Management increased its holding by 8% to 1.3 million shares, while John Griffin’s Blue Ridge Capital upped its stake by 3% to 2.45 million shares. Robert Joseph Caruso‘s Select Equity Group raised its stake by 2% to 2.87 million shares too.
Like hedge funds, analysts are mixed on the stock. One analyst has a ‘Sell’ rating, six have ‘Hold’ ratings, and four have ‘Buy’ ratings.
While IHS’ earning report was good, the stock of IHS is dependent on its potential billion-dollar bid for Solera Holdings Inc (NYSE:SLH) in the near term. IHS stock sold off on Monday amid a broader market decline because the market did not like the potential acquisition. Investors fear that IHS will overpay and destroy shareholder value.
SYNNEX Corporation (NYSE:SNX) reported mixed third quarter results, with EPS of $1.47 on revenues of $3.33 billion, versus expectations of $1.43 in EPS on revenues of $3.28 billion. Guidance was mixed with the company forecasting fourth-quarter revenue in the range of $3.48 – $3.58 billion and EPS between $1.74 and $1.79, versus expectations of $3.72 billion and $1.78, respectively. SYNNEX’s stock is down 1.24% in early morning trade.