Why Are Investors Buzzing About These 5 Stocks Today?

It’s the start of another trading week today and investors are buzzing over the news that Australian Craig Wright might be the founder of Bitcoin. Some people, such as the writers at the BBC, believe Wright’s claim, while others on Reddit and elsewhere are waiting for more proof. Whether Mr. Wright is indeed the founder of bitcoin or not, one thing is for sure, that being that bitcoin’s blockchain technology will greatly affect future financial transactions for the better. Among the other companies buzzing this morning are SYSCO Corporation (NYSE:SYY), Loews Corporation (NYSE:L), Enbridge Energy Partners, L.P. (NYSE:EEP), Cna Financial Corp (NYSE:CNA), and Helmerich & Payne, Inc (NYSE:HP). Let’s take a closer look at why these stocks are in the spotlight and see how the world’s greatest investors are positioned in each of them.

We believe that imitating hedge funds and other large institutional investors can be helpful in identifying stocks capable of outperforming the broader market. Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).

SYSCO Beats Expectations

Shares of SYSCO Corporation (NYSE:SYY), the global leader in selling, marketing and distributing food products to restaurants, are in the green by 2% after the company reported earnings of $0.46 per share on revenue of $12 billion for the third quarter of fiscal year 2016, exceeding the consensus estimates by $0.04 per share and $130 million, respectively. Sales inched up by 2.1% year-over-year while gross margin increased by 34 basis points to 17.9%. Adjusted operating income rose by 16% to $438 million. With respect to how the elite funds are positioned in SYSCO, our data shows that some hedge funds might have missed out on today’s gains. The number of top funds that held shares of SYSCO Corporation (NYSE:SYY) fell to 22 from 30 quarter-over-quarter as of December 31.

Loews’ Earnings Fall Short of the Mark

Loews Corporation (NYSE:L) turned in net income of $102 million, or $0.30 per share for the three months ended  March 31, versus $109 million, or $0.29 per share, in the first quarter of 2015. Although Loews Corporation (NYSE:L)’s earnings were considerably lower than analysts’ expectations of $0.52 per share, the conglomerate’s stock has rallied today anyway, to the tune of 1.6% in morning trading. Part of the reason for the lower-than-expected earnings was lower income from CNA Financial, which turned in pre-tax income of $86 million, down from $304 million a year earlier. Overall Loews’ book value per share stayed relatively flat at $52.98, up a few cents from the previous quarter’s book value of $52.72 per share. 19 elite funds that Insider Monkey tracks owned 2.4% of the company at the end of December.

On the next page we examine what’s happening with Enbridge Energy Partners LP, CNA Financial, and Helmerich & Payne.

Enbridge Energy Reports Mixed Results

Enbridge Energy Partners, L.P. (NYSE:EEP) is slightly higher in morning trading after the company reported mixed earnings results for the first quarter. For the period, Enbridge earned $0.17 per share on sales of $1.06 billion, missing estimates of $0.13 per share and $1.20 billion, respectively. Although the company averaged 15% higher liquid pipeline systems deliveries in the first quarter of 2016 compared to the first quarter of 2015, sales still dropped by 25.9% year-over-year. First quarter adjusted EBITDA was $466.2 million while Discounted Cash Flow was $244.5 million. Enbridge Energy Partners, L.P. (NYSE:EEP) was in the portfolios of five top funds at the end of December out of the 786 active funds that Insider Monkey tracks in its database.

CNA Financial Rallies Despite Lower Net Income

Shares of Cna Financial Corp (NYSE:CNA) have surged by 3.2% out of the morning gate despite the company’s aforementioned lower-than-expected first quarter results. For the first three months of the year, the Loews’ subsidiary, which is a separate publicly-traded company, earned $0.34 per share, greatly missing estimates of $0.64 per share, while the company’s book value per share inched fell to $42.41 from $43.49 quarter-over-quarter. Shares could be higher this morning because the company’s underwriting performance was strong, with CNA Financial’s core P&C combined ratio improving year-over-year by 2.8 percentage points to 96.1%. With the stock trading for $32.77 a share, some investors evidently think there is more upside given that the company’s book value is over $40. Of the funds that we track, 12 of them owned $53.77 million worth of Cna Financial Corp (NYSE:CNA)’s shares on December 31, up from 11 funds with $34.61 million in holdings on September 30.

Helmerich & Payne Falls on Losses

Helmerich & Payne, Inc. (NYSE:HP) reported net income of $21 million from operating revenue of $438 million for the second quarter of fiscal year 2016, well down from the $154 million in net income on operating revenue of $886 million that it pulled in for the second quarter of fiscal year 2015. If excluding the effect of after-tax income related to a combination of items, Helmerich & Payne’s adjusted net income would have been a loss of over $0.24 per share, which has pushed shares down by 6% this morning. The oil and gas driller’s sales and earnings have struggled due to the soft energy prices. Hedge fund sentiment remained stable in the former Dividend Aristocrat during the fourth quarter. 26 elite funds held shares of Helmerich & Payne, Inc. (NYSE:HP) at the end of December, down by one from the end of September.

Disclosure: None