U.S. stock futures are flat this morning following a decline in crude prices over worries surrounding renewed oversupply. Investors are also digging into the latest quarterly earnings from several companies and awaiting a report from the U.S. Commerce Department concerning economic health. Among the stocks making moves this morning are Xerox Corp (NYSE:XRX), LyondellBasell Industries NV (NYSE:LYB), Enbridge Inc (NYSE:ENB), Phillips 66 (NYSE:PSX), and Merck & Co., Inc. (NYSE:MRK). Let’s see what’s happening with these stocks and check out hedge fund sentiment towards them.
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 beat the S&P 500 by around 95 basis points per month (see more details here).
vichie81/Shutterstock.com
Xerox Beats Estimates
Xerox Corp is in the spotlight today after the company beat analysts’ forecasts for its second quarter earnings. The Connecticut-based company posted EPS of $0.30, topping the consensus estimate of $0.25. Sales for the quarter totaled $4.40 billion, narrowly eclipsing the consensus mark of $4.39 billion. For the full 2016 fiscal year, Xerox expects EPS of $1.10-to-$1.20. The company said it is making progress towards splitting its business into two separate publicly-traded companies. Xerox CEO Ursula Burns said that the company’s services segment delivered significant margins and that revenue is growing in document outsourcing. A total of 29 hedge funds in our database were long Xerox Corp at the end of the first quarter.
LyondellBasell Misses Estimates
LyondellBasell Industries NV is over 6% in the red in morning trading after the company’s second quarter results missed analysts’ expectations. The chemical company had adjusted earnings of $2.45 per share, beneath the Street’s expectation of $2.54 per share. Revenue for the quarter came in at $7.33 billion, well below estimates of $7.76 billion. 54 hedge funds in our system held stakes in LyondellBasell Industries NV at the end of March.
On the next page we’ll discuss the results out of Enbridge, Phillips 66, and Merck & Co.
Enbridge Posts Second Quarter Results
Phillips 66 Posts Mixed Results
Phillips 66 (NYSE:PSX) has dipped by 2.66% this morning despite its second quarter earnings beating analysts’ estimates. The Texas-based energy company reported adjusted EPS of $0.94, beating the $0.93 consensus mark. However, the company’s quarterly revenue of $22.31 billion was well below the $25.52 billion anticipated by analysts. Phillip 66’s CEO Greg Garland said in a statement that the company delivered industry-leading safety performance in the quarter. Mr. Garland added that utilization rates of refining reached record highs and chemicals completed a major turnaround in the quarter. As of the end of the first quarter, 34 hedge funds in our system owned shares of Phillips 66 (NYSE:PSX).
Merck & Co Powers Past Estimates, Reports Increase in Dividend
Merck & Co., Inc.’s stock has gained a little less than 1% today after the company reported second quarter EPS of $0.93 on $9.84 billion in revenue, topping the consensus estimates of $0.91 in EPS on $9.78 billion in revenue. For the full fiscal year, the pharmaceutical company expects EPS of $3.67-to-$3.77, in-line with the consensus target of $3.72. The company also reported a 1% increase to its quarterly dividend, driven by higher sales of its cancer drug, Keytruda. Out of 766 active hedge funds tracked by Insider Monkey, 70 funds were long Merck & Co., Inc. at the end of March .
