All three market indices are in the red on Thursday following downbeat earnings from some major companies and a Labor Department report which showed weekly jobless claims that were higher than expected. Investors are keeping a close watch on several stocks today, including Oracle Corporation (NYSE:ORCL), NetSuite Inc (NYSE:N), Colgate-Palmolive Company (NYSE:CL), Mastercard Inc (NYSE:MA), Ford Motor Company (NYSE:F), and Royal Dutch Shell plc (ADR) (NYSE:RDS.A). Let’s find out why these stocks are on investors’ radar today and also analyze what the hedge funds tracked by Insider Monkey think of them.
We determine hedge fund sentiment by analyzing the equity portfolios of some of the best-performing hedge funds and institutional investors. Through extensive research, we have determined that the due diligence that these investors employ, as well as their long-term focus makes them perfect targets to emulate. However, the results of our analysis have also showed that the small-cap picks of these funds can generate much better returns, with the 15 most popular small-cap stocks beating the market by an average of 95 basis points per month (read more details here).
Oracle to Acquire NetSuite
Shares of Oracle Corporation (NYSE:ORCL) and NetSuite Inc (NYSE:N) are making moves this morning after Oracle announced that it has entered into a definitive agreement with NetSuite to acquire the cloud pioneer for $109.00 per share in cash, or approximately $9.3 billion. Oracle’s CEO Mark Hurd said in a statement that the cloud applications of both companies complement each other and will coexist in the marketplace “forever”. Mr. Hurd said that Oracle intends to invest heavily in engineering and distribution in the coming days. NetSuite’s CEO Zach Nelson said that the combination of NetSuite and Oracle is a “winner” for NetSuite’s customers, employees and partners.
As of the end of the first quarter, a total of 14 hedge funds in our database owned shares of NetSuite Inc (NYSE:N), while 62 funds amassed in aggregate around $7.9 billion worth of Oracle Corporation (NYSE:ORCL)’s stock.
Colgate-Palmolive Misses Estimates
After leaping out of the morning gates, Colgate-Palmolive Company (NYSE:CL) is now flat after the company missed analysts’ estimates with its second quarter earnings. The New York-based consumer products company earned $0.67 per share for the quarter, trailing the estimates of $0.69. Revenue for the quarter came in at $3.85 billion, which also narrowly missed the consensus forecast of $3.86 billion. Colgate-Palmolive’s revenue suffered due to international currency headwinds, as the company relies massively on its operations outside the U.S. In a statement, Colgate’s CEO Ian Cook said that the company managed to increase its organic sales despite challenging global macroeconomic conditions. At the end of March, 36 hedge funds tracked by us were bullish on Colgate-Palmolive Company (NYSE:CL), up from 32 funds a quarter earlier.
On the next page we’ll discuss the latest results out of MasterCard, Ford, and Royal Dutch Shell.
Mastercard Beats Estimates
Mastercard Inc (NYSE:MA) shares have gained over 1% this morning after the company beat second quarter revenue and profit expectations. The payment processing company reported EPS of $0.96, topping the consensus estimate of $0.90. Revenue for the quarter came in at $2.70 billion, above the forecasts of $2.59 billion. MasterCard’s CEO Ajay Banga said in a statement that the company carried “solid momentum” through the second quarter. Mr. Banga said that MasterCard’s recent acquisition of payment systems company VocaLink will expand its capabilities beyond card-based solutions. Out of the 766 active funds in our database, 80 hedge funds held long positions in Mastercard Inc (NYSE:MA) at the end of the first quarter.
Ford Posts Disappointing Quarter
Ford Motor Company (NYSE:F)’s stock is getting battered today, losing nearly 10%, after the company missed analysts’ forecasts for the second quarter as it experienced a decline in sales in the US and China. The Michigan-based automaker posted second quarter EPS of $0.52, missing the consensus estimate of $0.60. Revenue in the quarter came in at $39.5 billion, easily topping estimates of $36.3 billion. However, Ford CFO Bob Shanks said in a press briefing that the second-half will be a challenging one for the automaker, as it anticipates a weak third quarter due to higher costs of launching the new Super Duty pickup truck. Ken Fisher’s Fisher Asset Management was one of 33 funds in our system that were bullish on Ford Motor Company (NYSE:F) at the end of the first quarter.
Royal Dutch Shell Down After Weak Second Quarter
Royal Dutch Shell plc (ADR) (NYSE:RDS.A) has slipped by more than 3% today after the company’s second quarter results missed analysts’ forecasts due to poor refining margins and declining oil prices. The Netherlands-based company’s adjusted profit plunged by a whopping 72% year-over-year to $1.04 billion, or $0.26 per share during the quarter, well below the consensus estimate of $0.53. However, revenue of $58.42 billion surpassed the target mark of $55.5 billion. 34 funds that we track were long Royal Dutch Shell plc (ADR) (NYSE:RDS.A) at the end of the first quarter, up from 28 funds a quarter earlier.