Today’s Hot Stocks: Exxon, Kinder Morgan, eBay, More

The markets are relatively quiet today in the pre-market hours as all three index futures are close to flat. Among the companies traders are chattering about today are Exxon Mobil Corporation (NYSE:XOM), InterOil Corporation (USA) (NYSE:IOC), Kinder Morgan Inc (NYSE:KMI), eBay Inc (NASDAQ:EBAY), and QUALCOMM, Inc. (NASDAQ:QCOM). Let’s see why each stock is in the spotlight and examine what the smart money thinks of each stock.

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).

Oil Search Fails to Counter Exxon’s Knock-Out Punch

Exxon Mobil Corporation (NYSE:XOM) has a substantially higher probability of successfully purchasing InterOil Corporation (USA) (NYSE:IOC) after Oil Search stated on Thursday that it will not raise its original offer for InterOil. Oil Search and another firm originally agreed to buy InterOil for $2.2 billion, but Exxon Mobil swooped in shortly afterwards with a better offer of cash and contingent rights. Analysts believe Exxon’s offer is worth around $2.5 billion based on currently available public information.

InterOil’s Board of Directors also recently put out a press release stating that they believe Exxon’s offer is better. By acquiring InterOil, Exon Mobil will likely speed up the completion of Elk-Antelope and realize substantial synergies in the process. According to our database, Ken Fisher‘s Fisher Asset Management was a top shareholder of Exxon Mobil at the end of June, owning 4.53 million shares. Meanwhile, ten funds had a bullish position in InterOil Corporation (USA) (NYSE:IOC) at the end of March.

Kinder Morgan Reports Earnings

Kinder Morgan Inc (NYSE:KMI) shares are more than 2% lower in the pre-market after the energy infrastructure giant announced second quarter earnings of $0.15 per share, distributable cash flow of $0.47 per share, and revenue of $1.14 billion. Although Kinder’s earnings were in-line with estimates, distributable cash flow fell from $0.50 per share a year ago, and revenue missed the consensus mark by $310 million. Revenue fell in part due to weakness in the company’s carbon dioxide division, which saw sales fall by 15% year-over-year. Meanwhile Kinder Morgan plans to cut its 2016 capex budget to $2.8 billion from $3.3 billion. Management kept the company’s dividend payment the same at $0.125 per share and has said that they do not expect to tap the capital markets for growth capex in the medium-term beyond 2016. 58 elite funds that we track had a long position in Kinder Morgan Inc (NYSE:KMI) at the end of the first quarter, down by nine funds from the end of 2015.

On the next page we’ll take a closer look at the earnings reports issued by eBay and QUALCOMM after the market close yesterday.

eBay Delivers Double Beat

eBay Inc (NASDAQ:EBAY) shares are 6% in the green in the pre-market after the company reported earnings of $0.43 per share on revenue of $2.23 billion for the second quarter, beating estimates by $0.01 per share and $60 million, respectively. Sales rose by 5.7% year-over-year on the back of GMV growth of 5% on a FX-Neutral basis and 1% growth on an as-reported basis. The company’s classified platforms and StubHub segment also delivered strong growth. In addition, the company bought back $500 million of common stock in the time period and its Board approved an additional $2.5 billion stock repurchase authorization. Management expects non-GAAP EPS to come in at $1.85-to-$1.90 for the full 2016 year, on revenue of $8.85 billion-to-$8.95 billion. Of the 766 funds that we track, 57 funds owned $2 billion in shares of eBay Inc (NASDAQ:EBAY) on March 31, which accounted for 7.10% of the float.

QUALCOMM Results Come In Better-Than-Expected

Everybody’s favorite mobile chip play QUALCOMM, Inc. (NASDAQ:QCOM) reported better than expected results for its fiscal third quarter of 2016, announcing EPS of $1.16 on revenue of $6.03 billion, beating the consensus marks by $0.19 per share and $450 million, respectively. Operating cash flow was a respectable $1.8 billion. In contrast to previous quarters, revenue actually increased by 3.4% year-over-year and by 9% on a sequential basis. The company made meaningful progress with licensing in China and management remains confident in the company’s investments in 5G and other advanced technologies that should ensure more product demand in the future. For the fiscal fourth quarter, the company sees adjusted EPS coming in at $1.05-to-$1.15 on revenue of $5.4 billion-to-$6.2 billion. The number of funds in our system with holdings in QUALCOMM, Inc. (NASDAQ:QCOM) fell by nine quarter-over-quarter to 59 as of the end of March.

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