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Shares of Texas Instruments, Dunkin, Aetna, Cabelas, and Raytheon Being Propelled by Earnings, Other News

U.S stocks are moving in both directions on Thursday afternoon, with the S&P and Nasdaq both up slightly, helped by tech stocks, while the Dow is down by roughly 0.24% due to weakness in certain key tech stocks. As one of the most earnings-heavy weeks of the quarter approahces its end, we’ll take a look into the results posted by Texas Instruments Incorporated (NASDAQ:TXN), Dunkin Brands Group Inc (NASDAQ:DNKN), Aetna Inc (NYSE:AET), Cabelas Inc (NYSE:CAB) and Raytheon Company (NYSE:RTN), all of which are on the move today on the back of their earnings calls. In addition, we’ll analyze what the hedge funds in our database think about these companies long-term.

Academic research has shown that certain insider purchases historically outperformed the market by an average of seven percentage points per year. This effect is more pronounced in small-cap stocks. Another exception is the small-cap stock picks of hedge funds. Our research has shown that imitating the 15 most popular small-cap stocks among hedge funds outperformed the market by nearly a percentage point per month between 1999 and 2012 (read more details here).

Texas Instruments Surges on Strong Results and Guidance

Let’s start with Texas Instruments Incorporated (NASDAQ:TXN), which is up by almost 1% in Thursday trading following the announcement of the company’s first quarter financial results. After the market closed on Wednesday, the large-cap semiconductor maker reported EPS of $0.65 on revenue of $3 billion, beating the Street’s consensus estimates by $0.03 and $20 million, respectively. Management said the main catalyst for the beat were its automotive products, and industrial and communications equipment. Also noteworthy is that the firm’s gross margin hit a record 60.6% in the first quarter. Guidance for the ongoing quarter was also encouraging, with Texas Instruments Incorporated (NASDAQ:TXN) expecting revenue between $3.07 billion and $3.33 billion and EPS of $0.67-to-$0.77, topping consensus second quarter estimates at the mid-point of both ranges.

38 funds among those we track were long Texas Instruments at the end of the fourth quarter of 2015.

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Dunkin Falls in Spite of Top and Bottom-Line Beats

Next up is Dunkin Brands Group Inc (NASDAQ:DNKN), a company that counts the support of several big hedge funds, including Eashwar Krishnan’s Tybourne Capital Management, which held ownership of 4.85 million shares of the company after boosting its stake by 55% over the fourth quarter.

Dunkin Brands Group Inc (NASDAQ:DNKN) is trading down by approximately 0.6% on Thursday afternoon, even though the company reported top and bottom-line beats this morning. Before the bell rang, the quick service restaurants franchisor posted EPS of $0.44, $0.01 above the Street’s consensus, on revenue of $189.78 million, which beat estimates by $1.78 million. Management also declared a $0.30 per share quarterly dividend, in-line with the previous payout. Interestingly, same-store sales at U.S Dunkin’ Donuts stores surged by 2% during the quarter, largely driven by “growth in beverages and breakfast sandwiches, along with price and favorable weather,” CEO Nigel Travis explained.

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We study the trading activity and the news behind it in three other stocks on the next page.

Aetna Still on Track to Buy Humana

Shares of Aetna Inc (NYSE:AET) are trading up by 1.3% on Thursday afternoon, helped by an earnings double beat announced this morning. In spite of falling enrollment, the health insurer’s EPS of $2.30 came in $0.07 ahead of expectations, while revenue of $15.69 billion, up by 4.0% year-over-year, beat the Street’s consensus by $240 million. Management also boosted its 2016 guidance; the team now expects full year EPS between $7.90 and $8.10, up from a previous projection of at least $7.75. Analysts are modeling EPS of $7.95 on average. In addition, the company assured investors that its $35 billion acquisition of competitor Humana Inc (NYSE:HUM) remains on track to close in the second half of the year.

Aetna Inc (NYSE:AET) is quite popular in the hedge fund world. 66 firms in our database held long positions in the stock by the end of 2015, with their combined stakes accounting for roughly 8.6% of the company’s total shares. A noteworthy position was that of Larry Robbins’ Glenview Capital, which disclosed ownership of 5.73 million shares of Aetna valued at more than $620 million as of December 31.

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The Battle for Cabelas’ Credit Card Business Heating Up

Yet another stock moving on its earnings call on Thursday is Cabelas Inc (NYSE:CAB), which is up by more than 1.3% after reporting its first quarter financial results this morning. Before the market opened, the retailer posted EPS of $0.43, which beat the Street’s consensus by $0.05. However, revenue of $864.66 million, up by 4.5% year-over-year, missed estimates by $25.95 million.

In other news, Reuters reported on Wednesday afternoon that at least five financial services companies are contending for the acquisition of Cabelas Inc (NYSE:CAB)’s credit card business, as the company explores the option of selling itself. Allegedly, the parties to have expressed interest in the credit card business thus far are Citigroup Inc (NYSE:C), Bank of America Corp (NYSE:BAC), Capital One Financial Corp. (NYSE:COF), Toronto-Dominion Bank (NYSE:TD), and Synchrony Financial (NYSE:SYF). 22 funds among those that we track held 15.3% of Cabelas’ float on December 31.

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Raytheon Declines on Lukewarm Guidance

Finally, there’s Raytheon Company (NYSE:RTN), which is down by 2.3% this afternoon, even though the company beat expectations on both the top and bottom lines. First quarter EPS of $1.43 came in $0.05 ahead of estimates, while revenue of $5.76 billion was $300 million higher than anticipated, helped by strong sales in its missile systems business. In addition, management boosted its 2016 EPS guidance. While the company still envisions revenue of between $24 billion and $24.5 billion for the full year, EPS is now expected to come in between $6.93 and $7.13, up from a previous projection of $6.80-to-$7.00. Analysts have projected EPS of $7.03 on revenue of $24.34 billion.

Raytheon Company (NYSE:RTN) counted the backing of 35 funds among those that we track by the end of 2015. Among them was Cliff Asness’ AQR Capital Management, which had ownership of 1.52 million shares of the company.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.