Wall Street has rebounded on Wednesday amid Janet Yellen’s comments during today’s Financial Services committee, which stressed that the tightening financial conditions due to stock market declines, the uncertainty about China’s economy, and the revaluation of credit risks could jeopardize the U.S economy. In this environment of uncertainty, several stocks are trending in today’s session on various pieces of news. Among them are Time Warner Inc (NYSE:TWX), Walt Disney Co (NYSE:DIS), SolarCity Corp (NASDAQ:SCTY), Panera Bread Co (NASDAQ:PNRA), and Anheuser Busch Inbev SA (ADR) (NYSE:BUD). In addition to recapping the news, we’ll assess the latest hedge fund sentiment towards these stocks.
Hedge fund sentiment is an important metric for assessing long-term profitability. At Insider Monkey, we track over 700 hedge funds, whose quarterly 13F filings we analyze to determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (read more details here).
Back to Wednesday’s movers, shareholders of Time Warner Inc (NYSE:TWX) have endured a rocky day, as the stock opened down by nearly 10% before rebounding back to even on the day, only to slip back down by 3% now in afternoon trading. The heavy trading activity comes after the company reported fourth quarter EPS of $1.06 on revenue of $7.08 billion, beating profit estimates by $0.05 per share but missing revenue expectations by $450 million. Time Warner’s revenue declined by 5.9% year-over-year, due to a decrease in its Warner Bros. business, which was partially offset by the performance of Home Box Office (HBO) and Turner. The former’s revenue declined by 13% to $3.3 billion while the latter’s revenue inched up by 6% to $1.41 billion. Moreover, Time Warner raised its quarterly dividend to $0.4025 per share from its prior dividend of $0.35, payable on March 15, 2016. Moreover, management expects full-year adjusted EPS in the range of $5.30 to $5.40, stronger than the Street’s expectations of $5.26.
Among the funds we follow, 69 reported long positions in Time Warner Inc (NYSE:TWX) as of the end of September, up by one fund from a quarter earlier. Daniel S. Och’s OZ Management and Ken Griffin’s Citadel Investment Group are both long Time Warner.
In other news, Walt Disney Co (NYSE:DIS) is down by 4.5% as investors become more pessimistic, despite the company beating estimates for earnings and revenue with its latest financial report. For its first quarter of fiscal year 2016, Walt Disney reported EPS of $1.63 on revenue of $15.24 billion, exceeding earnings estimates by $0.18 per share and revenue estimates by $490 million. However, the stock has fallen due to concerns over the performance of the company’s ESPN and TV network business. As a consequence, several analysts have lowered their price targets on the Disney’s stock. Among them, analysts at Nomura, JPMorgan Chase, and FBR & Co. all trimmed their price targets, to $110, $118 and $101, respectively.
Walt Disney Co (NYSE:DIS) lost popularity in the third quarter of 2015, as out of the 730 funds that we track, 48 funds held shares of the company on September 30, down from 60 funds on June 30. Jacob Rothschild‘s RIT Capital Partners held 509,000 Walt Disney shares valued at $52.03 million at the end of September, which accounted for a 12.14% stake of the fund’s public equity portfolio.
We check out the other three trending stocks on the following page.