Time Warner, Walt Disney and SolarCity Among the Trending Stocks on Wednesday

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.

Picking up where we left off, SolarCity Corp (NASDAQ:SCTY) shares are down by 20% today, and it is another company that is suffering in the wake of its quarterly results. Yesterday, the company reported fourth quarter revenue of $115.5 million, up by 60.8% year-over-year, and beating expectations by $9.88 million, while its loss per share grew to $2.37 per share, also better than analysts’ expectations of a loss of $2.59 per share. Surprising analysts and impacting the market however was its poor forecast. SolarCity anticipates a first quarter loss of between $2.55 and $2.65 per share, excluding one-time items, which is higher than the $2.36 loss it incurred for the same quarter of the previous year.

At the end of September, 21% of SolarCity Corp (NASDAQ:SCTY)’s common stock was held by 29 investors in our system. Kenneth Tropin‘s Graham Capital Management had the largest holding of this stock among the funds we track, with 22.0 million shares of Solarcity at the end of September.

Next on our list is Panera Bread Co (NASDAQ:PNRA), whose stock is well in the green, by more than 6%, after posting a big earnings beat after the market close yesterday. For the fourth quarter, the chain of bakery-cafes posted earnings of $1.88 and revenue of $691.77 million. Moreover, Panera Bread managed to beat the EPS expectations by $0.10, but the revenue came short of the consensus estimate by $3.66 million. For the current year, the company expects to report EPS growth of between 2% to 5% compared to 2015.

23 funds reported ownership of Panera Bread Co (NASDAQ:PNRA) shares as of the end of September, and they held 13.8% of the company’s common stock at that time. Christian Leone‘s Luxor Capital Group holds the largest stake in the company among the funds we follow, having reported ownership of 997,838 shares in its latest quarterly filing.

Anheuser Busch Inbev SA (ADR) (NYSE:BUD) shares have advanced by 1% today, alongside most of its peers from the consumer industry. The stock is trending higher after news broke of the firm receiving a $2.85 billion offer from ASAHI GROUP HLDGS NPV (OTCMKTS:ASBRF) to purchase Anheuser’s Peroni and Grolsch beer brands. The deal is valued based on an estimated multiple of 21.5-times the brands’ EBITDA. The Japanese brewer will improve its business in the premium beer segments in various European countries, such as Italy, Britain, and the Netherlands, while having a new opportunity to distribute its namesake Asahi Super Dry beer.

At the end of September, approximately 3.1% of Anheuser Busch Inbev SA (ADR) (NYSE:BUD)’s common stock was held by 49 funds in our system, up by eight funds from the end of the second quarter. Tom Russo‘s Gardner Russo & Gardner reported ownership of 5.18 million Anheuser Busch shares as of the end of the third quarter.

Disclosure: None