The US stock market is trading significantly lower today, amid Alcoa reporting worse-than-expected results for the third quarter and long-term bond yields advancing on fears that the Fed will raise short-term rates until the end of 2016.
Among the other items catching investors’ attention on Wall Street today are some news concerning Aaron’s, Inc. (NYSE:AAN), Conn’s Inc (NASDAQ:CONN), Southwest Airlines Co (NYSE:LUV), Fastenal Company (NASDAQ:FAST), and Wells Fargo & Co (NYSE:WFC). Let’s take a closer look at the companies in question and check in with the smart money investors tracked by us to see how they were positioned towards the five equities at the end of the second quarter.
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Conn’s Inc (NASDAQ:CONN) and Aaron’s, Inc. (NYSE:AAN) are each lower by 5% and 10%, respectively, after peer Rent-A-Center Inc (NASDAQ:RCII) issued some disappointing third quarter preliminary results. For the three months ended September 30, Rent-A-Center estimates its core U.S. same store sales retreated 12% year-over-year, and its Acceptance Now same store sales were essentially flat. Diluted earnings per share is expected to be between $0.05 and $0.15. Although Rent-A-Center management blamed the implementation of a new point-of-sale system for the core sales decline, traders are afraid that the soft results might be an indication of lower-than-expected sector-wide demand. According to our database of around 749 funds, 25 funds held shares of Aaron’s, Inc. (NYSE:AAN) and six investors were long Conn’s Inc (NASDAQ:CONN) at the end of June.
Traders are watching Southwest Airlines Co (NYSE:LUV) today after the airline reported its September traffic numbers. Southwest flew 9.9 billion revenue passenger miles last month, an increase of 7.9% from the 9.2 billion revenue passenger miles flown in September 2015. Available seat miles rose by 6% to 11.8 billion and load factor for the month came in at 84.2%, compared with 82.7% a year earlier. Due to the results, Southwest continues to estimate its third-quarter operating revenue per ASM to decline in the 3.5%-4.5% range. John Armitage‘s Egerton Capital Limited inched down its stake in Southwest Airlines Co (NYSE:LUV) by 7% to 15.2 million shares during the second quarter.
On the next page, we find out why traders are keeping tabs on Fastenal Company and Wells Fargo & Co.