The markets looked a little shaky on Thursday morning as oil prices and earnings’ reports threatened to dent sentiment, but they have rebounded into positive territory in the early afternoon hours. Among the stocks generating the most interest and trading activity today are BlackRock, Inc. (NYSE:BLK), Pier 1 Imports Inc (NYSE:PIR), PepsiCo, Inc. (NYSE:PEP), Sunedison Inc (NYSE:SUNE), and Chipotle Mexican Grill, Inc. (NYSE:CMG). Let’s have a detailed look at the factors behind the movement in these stocks and analyze hedge funds’ collective sentiment towards them.
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Weak Earnings Report from BlackRock
BlackRock, Inc. (NYSE:BLK)’s stock has gained 1.60% today after the gargantuan investment firm reported its earnings for the first quarter. The firm reported earnings of $4.25 per share, missing analysts’ expectations of $4.29 per share. Revenue declined by 3.6% year-over-year to $2.62 billion, while there was a 20% year-over-year drop in first quarter profits, to $657 million. Larry Fink, CEO of BlackRock, cited lower fees collected on investment products as the main reason for the bleak quarterly report. Last month, Bloomberg reported that the firm is planning to cut 400 jobs because of market pressure and rising costs.
34 funds in our system held long positions in BlackRock at the end of 2015, with a total value of approximately $485.7 million. Phill Gross’ Adage Capital Management was one of the most notable of those shareholders, with ownership of more than 190,000 shares of the company.
Declining Sales and Revenue at Pier 1
Shares of Pier 1 Imports Inc (NYSE:PIR) are down by approximately 4.77% this afternoon following its earnings report for the fourth quarter of fiscal year 2016. The retailer reported earnings of $0.23 per share, down from $0.37 per share a year earlier, while the company’s revenue dipped by 1.4% year-over-year to $542.33 million. Pier 1 Imports’ strategy to shift towards e-commerce was partly responsible for the dent in sales.
Overall, 12 hedge funds out of those tracked by Insider Monkey held positions in Pier 1 Imports at the end of the fourth quarter. Mario Gabelli’s GAMCO Investors held 954,700 shares of Pier 1 Imports Inc (NYSE:PIR) on December 31.
We uncover the driving forces behind three other moving stocks today on the next page.
Firm Downgrades PepsiCo
PepsiCo, Inc. (NYSE:PEP) has declined by 0.47% today after two important investment firms expressed bearishness towards the beverage company. Financial services holding company Stifel Nicolaus downgraded Pepsi to ‘Hold’ from ‘Buy’ over valuation concerns. The firm also showed concerns over a lack of growth factors. Susquehanna also reiterated its rating of ‘Hold’ on Pepsi, citing the underperformance of the beverage company in the U.S. PepsiCo is set to announce its quarterly earnings report on next week.
A total of 58 hedge funds tracked by Insider Monkey held stakes in PepsiCo, Inc. (NYSE:PEP) at the end of the fourth quarter, with the total value of their investments coming in at $6.7 billion. Nelson Peltz‘s Trian Partners owned more than 18.31 million shares of the company as of December 31.
No Evidence of Fraud Found at SunEdison
Sunedison Inc (NYSE:SUNE)’s stock has skyrocketed by more than 70% after independent directors of an audit counsel announced that they didn’t find sufficient evidence for fraud or “willful misconduct” by the company’s management in relation to its financial statements. However, the counsel identified a lack of sufficient controls and processes and overly optimistic cash forecasts as some weaknesses in its overall management practices. The investigation also found evidence of wrongdoing by one of the company’s former employees regarding negotiations to terminate its acquisition of Vivint Solar Inc (NYSE:VSLR). The solar company’s stock has plunged by more than 90% since the start of the year. This month, the Wall Street Journal reported that Sunedison Inc (NYSE:SUNE) may be preparing to file for bankruptcy in the coming weeks.
50 funds among those that we track had amassed around 31.80% of Sunedison Inc (NYSE:SUNE)’s outstanding stock as of the end of 2015. Among them was activist David Einhorn’s Greenlight Capital, which owned approximately 18.61 million shares of the company.
JP Morgan Optimistic on Chipotle
Shares of Chipotle Mexican Grill, Inc. (NYSE:CMG) have gained more than 3.30% after JP Morgan expressed positive sentiment for the company today. The investment bank upgraded its rating on the company to ‘Overweight’ from ‘Neutral’ and set a target price of $510 on the stock. JP Morgan analyst John Ivankoe said that investors can expect an earnings recovery at Chipotle because it is a highly “meaningful” brand that is regaining customer trust. He also predicted annual 20% earnings per share growth for the company through 2020.
Out of the 785 hedge funds in our database, 39 funds held positions in Chipotle Mexican Grill, Inc. (NYSE:CMG) at the end of the fourth quarter, with a total value of around $1.1 billion. Andreas Halvorsen’s Viking Global held ownership of approximately 689,000 shares of the company on December 31.