Although today’s major economic release was largely in-line with estimates, as July ADP private payrolls rose by 179,000, all three indexes are slightly lower as traders take profits on the run-up since the Brexit decision in late-June.
In this article, we’ll examine the latest earnings results and other news out of Time Warner Inc (NYSE:TWX), Sinclair Broadcast Group Inc (NASDAQ:SBGI), Zoetis Inc (NYSE:ZTS), Humana Inc (NYSE:HUM), and Newfield Exploration Co. (NYSE:NFX). In addition, we’ll use SEC filings to determine how hedge funds have been trading these stocks.
At Insider Monkey, we track around 765 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details here).
Time Warner’s Earnings Ahead of Estimates
Shares of Game of Thrones producer and distributor Time Warner Inc (NYSE:TWX) are almost 2% higher after the media conglomerate reported second quarter earnings of $1.29, beating estimates by $0.13 per share. Revenue for the period was $6.95 billion, missing expectations by $100 million. However, guidance was strong, with management raising its full-year EPS outlook to $5.35-to-$5.45. The company also further diversified itself by purchasing 10% of online streamer Hulu for $583 million. David Einhorn‘s Greenlight Capital owned almost 5.8 million shares of Time Warner Inc (NYSE:TWX) at the end of the first quarter.
Sinclair Interested in Weather Channel TV, Reports Solid Results
Sinclair Broadcast Group Inc (NASDAQ:SBGI) has surged by over 3.5% in morning trading after the local TV broadcaster reported earnings of $0.52 per share on revenue of $666.53 million for the second quarter, meeting profit estimates and beating sales expectations by $8.35 million. Operating income rose by 12.9% year-over-year to $129.1 million as robust political advertising drove demand. In addition to the strong results, the Wall Street Journal reported yesterday that Sinclair could be interested in buying the Weather Channel’s TV operations for around $100 million. 42 funds in our system had a long position in Sinclair Broadcast Group Inc (NASDAQ:SBGI) at the end of March.
On the next page we’ll check out how Zoetis Inc, Humana Inc, and Newfield Exploration performed during the second quarter.
Zoetis Rises on Earnings
Shares of animal health drugmaker Zoetis Inc (NYSE:ZTS) have spiked by 3% today after the company’s second quarter results beat top- and bottom-line estimates, amounting to EPS of $0.49 on revenue of $1.21 billion, the latter figure up by 2.5% year-over-year. Analysts were expecting $0.05 per share and $40 million less, respectively. Guidance was robust, as due to strong demand, Zoetis’ management increased its full-year revenue outlook to $4.8 billion-to-$4.9 billion and its adjusted EPS outlook to $1.86-to-$1.93. Although the fund recently cut its stake to 3.8% of the float, Bill Ackman‘s Pershing Square is still one of the top shareholders of Zoetis Inc (NYSE:ZTS) as of July 7, owning 18.89 million shares.
Humana Beats Expectations
Although its stock performance today doesn’t reflect it, Humana Inc (NYSE:HUM) turned in a solid second quarter, with EPS of $2.30 on sales of $14.01 billion. The results beat estimates by $0.07 per share and $420 million respectively. All major lines of business with the exception of individual commercial exceeded management’s expectations and the company issued solid full-year guidance of $54.0 billion-to-$54.5 billion in revenue and adjusted EPS of at least $9.25. Larry Robbins‘ Glenview Capital reported owning a stake of 6.4 million shares of Humana Inc (NYSE:HUM) as of the end of March, down by 23% over the first quarter.
Newfield Inches Up on Crude Prices, Earnings
Newfield Exploration Co. (NYSE:NFX) is 3% in the green today for two reasons. Firstly, crude prices are around 1.8% higher after today’s EIA report, and secondly, the company reported better than expected second quarter earnings of $0.32 per share, beating estimates by $0.17 per share. Due to the lower oil prices, Newfield’s revenue contracted by 18.8% year-over-year to come in at $381 million and missed estimates by $22.2 million. Profits beat despite the revenue miss in part because domestic lease operating expense per BOE fell by 25% year-over-year. Separately, Newfield also announced that it will sell its assets in Texas for around $390 million in a move that will help it further deleverage. 49 funds that we track had a long position in Newfield Exploration Co. (NYSE:NFX) at the end of the first quarter, up by six funds quarter-over-quarter.