Although the broader markets are flat and crude futures are in the red, shares of five companies, Oxford Industries Inc (NYSE:OXM), Itron, Inc. (NASDAQ:ITRI), Wynn Resorts, Limited (NASDAQ:WYNN), Las Vegas Sands Corp. (NYSE:LVS), and Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL), are surging this morning.
In this article, we’ll find out why traders are bidding each stock higher and use the latest regulatory filing data to see how hedge funds traded the five stocks in the second quarter.
At Insider Monkey, we track around 750 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).
Oxford Industries’ Results Topple Estimates
Oxford Industries Inc (NYSE:OXM) shares are 14% in the green after the company reported better-than-expected second quarter results. For the period, Oxford earned $1.48 per share on revenue of $282.99 million, beating the consensus estimates by $0.10 and $8.44 million respectively. Revenue rose by 12.9% year-over-year as comparable-store sales at Tommy Bahama locations rose by 7%, while net sales increased by 8% at Lilly Pulitzer. For the full-year, Oxford Industries affirmed its previous revenue guidance of $1.03 billion-to-$1.05 billion and adjusted EPS guidance of $3.65-to-$3.80. CEO Thomas Chubb said, “We believe our strategic focus on building strong direct to consumer businesses will enable us to deliver another year of sales and earnings growth.” Ken Grossman and Glen Schneider‘s SG Capital Management initiated a position in Oxford Industries Inc (NYSE:OXM) during the second quarter, of slightly over 250,000 shares on June 30.
Itron Surges On Big Earnings Beat
Traders are bidding up Itron, Inc. (NASDAQ:ITRI) today after the company reported second quarter earnings of $0.65 per share, $0.22 ahead of analysts’ consensus estimate. Revenue for the quarter was $513.02 million, up by 9% year-over-year and $34.32 million higher than the consensus mark. Gross margin rose by 790 basis points to 33.1%, while Itron’s management announced that it is targeting additional annualized cost savings of around $40 million. For the full-year, Itron expects adjusted EPS of $2.20-to-$2.45 on revenue of $1.95 billion-to-$2.00 billion. 16 hedge funds that we track were long Itron, Inc. (NASDAQ:ITRI) at the end of the second quarter, unchanged from the end of the previous quarter.
On the next page we’ll examine why traders are bidding up Wynn Resorts, Las Vegas Sands, and Melco Crown Entertainment.
Casino Stocks Spike on Macau Strength
Wynn Resorts, Limited (NASDAQ:WYNN), Las Vegas Sands Corp. (NYSE:LVS), and Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL) are up by 5%, 5%, and 7% respectively, after new data showed that aggregate gambling revenue in Macau rose by 1.1% for the month of August. Analysts were expecting a 1.5% decline instead. The rise in Macau gambling revenue for the month of August is the first monthly year-over-year rise for the region in around two years. Gambling revenue in Macau has fallen substantially since 2014 due to China’s crackdown on corruption, which has sharply curtailed high-margin VIP activity in many Macau casinos. Given today’s numbers, bullish investors hope August’s results will mark a turning point in terms of demand.
Of the 750 hedge funds in our system that filed 13F’s for the June 30 reporting period, the smart money liked Wynn the most, with 30 of them reporting long positions in the stock as of the end of June. In second place was Las Vegas Sands Corp. (NYSE:LVS), with 23 funds being long the stock, while Melco Crown Entertainment Ltd (ADR) (NASDAQ:MPEL) brought up the rear, with the stock being in the portfolios of 16 hedge funds in our database.