With the earnings season ongoing, the US stock market is mixed with Dow Jones trading lower, while S&P 500 and NASDAQ have inched up.
Among the stocks traders are talking about are BP plc (ADR) (NYSE:BP), Valero Energy Corporation (NYSE:VLO), CONSOL Energy Inc. (NYSE:CNX), Mobileye NV (NYSE:MBLY), and Eli Lilly and Co (NYSE:LLY). Let’s examine why each stock is in the spotlight and see how the investors that we track at Insider Monkey are positioned towards them.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).
BP Whiffs on Earnings
Although crude prices were sharply higher in the second quarter versus the first quarter, BP plc (ADR) (NYSE:BP) nevertheless missed both profit and revenue estimates for the three months ended June 30. During the quarter, BP earned an adjusted $0.23 per share on revenue of $47.28 billion, missing the consensus estimates by $0.05 and $2.94 billion, respectively. Revenue fell by 25% year-over-year and BP reported a replacement loss of $2.25 billion due to accounting charges related to the oil spill in 2010 and weaker refining margins. The stock has declined by 1.6% in the morning session. The number of funds from our database with holdings in BP plc (ADR) (NYSE:BP) rose by two quarter-over-quarter to 34 at the end of March.
Valero Beats, Shares Inch Up by 2.4%
Although BP’s refining margins may have been soft, Valero Energy Corporation (NYSE:VLO)‘s results nevertheless came in ahead of expectations. For the second quarter, Valero earned $1.07 per share and reported revenue of $19.58 billion, versus analyst estimates of $1.03 per share in profit and $16.79 billion in sales. The new export laws helped pad Valero’s results, as the refiner exported a second quarter record of 396,000 barrels per day of diesel and gasoline. Management also returned $683 million of capital back to shareholders through buybacks and dividends. Cliff Asness’ AQR Capital Management owned over 4.8 million shares in Valero Energy Corporation (NYSE:VLO) at the end of the first quarter, according to its latest 13F filing.
On the next page, we examine CONSOL Energy, Mobileye NV, and Eli Lilly and Co.