Crude futures are in the red today after yesterday’s disappointing API inventory report, but the market is in the green following strong financial results posted by several big companies.
Meanwhile, traders keep their focus on the financial results that companies release. In this article, we analyze the results of five companies, St. Jude Medical, Inc. (NYSE:STJ), Stepan Company (NYSE:SCL), TE Connectivity Ltd (NYSE:TEL), Tupperware Brands Corporation (NYSE:TUP), and WABCO Holdings Inc. (NYSE:WBC), and we are going to take a look at the smart money sentiment towards them to get an idea about their long-term potential.
While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).
St. Jude In-Line
Although its earnings don’t matter as much given the company’s pending merger with Abbott Laboratories (NYSE:ABT), St. Jude Medical, Inc. (NYSE:STJ) nevertheless turned in an in-line second quarter, with EPS of $1.06 per share on revenue of $1.56 billion. Analysts were expecting a profit of $1.06 per share on sales of $1.55 billion. St. Jude’s sales rose by 10.6% year-over-year, led by strong total U.S. revenue growth of 11.5%. The company’s total international revenues increased by 10% to $767 million. Among the funds we track, 36 funds owned $850.61 million of St. Jude Medical, Inc. (NYSE:STJ) and accounted for 5.50% of the float on March 31, versus 41 funds and $729.17 million, respectively, a quarter earlier.
Stepan Company (NYSE:SCL) earned $1.31 per share on revenue of $454.6 million in the second quarter, beating estimates by $0.14 per share and $1.15 million. Earnings beat the consensus due to strong volume growth, better product mix, and improved asset utilization. Stepan’s gross margin inched up 280 basis points to 20.6%, while the company’s operating margin rose 310 by basis points to 9.4%. Although the costs associated with planned shutdowns for some plants could lower GAAP results, management remains optimistic about its core business for the rest of 2016. Jim Simons’ Renaissance Technologies reported a stake of almost 250,000 shares of Stepan Company (NYSE:SCL) held at the end of March.
On the next page, we examine the earnings reports of TE Connectivity, Tupperware Brands Corporation, and WABCO Holdings.