Express, Inc. (NYSE:EXPR)’s stock has dropped by more than 10% on Wednesday after it missed analysts’ estimates in its financial results for the fiscal first quarter. The apparel and accessories retailer reported EPS of $0.25, less than the estimates of $0.27. Revenue in the quarter came in at $502.9 million, worse than the estimated $522.73 million. Comparable sales declined by 3% in the quarter, whereas eCommerce sales slipped by 1%. For full fiscal 2016, the company expects its EPS in between $1.41 and $1.54, versus the consensus of $1.66. In a statement, Express, Inc. (NYSE:EXPR)’s CEO David Kornberg said that merchandise margin jumped 20% in the quarter due to the “disciplined approach” to inventories and smart use of promotions. Mr. Kornberg added that the full year guidance by the company reflects challenges in the retail sector. He said that the company is focused on key initiatives like delivering great fashion, acquisitions of new customers, inventory and implementation.
Follow Express Inc. (NYSE:EXPR)
Follow Express Inc. (NYSE:EXPR)
At the moment there are a multitude of indicators stock market investors employ to assess their holdings. Some of the most useful indicators are hedge fund and insider trading interest. We have shown that, historically, those who follow the top picks of the best fund managers can outpace the S&P 500 by a superb amount (see the details here).
Keeping this in mind, we’re going to view the key action regarding Express, Inc. (NYSE:EXPR).
How are hedge funds trading Express, Inc. (NYSE:EXPR)?
At the end of the first quarter, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, up by 36% from the fourth quarter of 2015. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Israel Englander’s Millennium Management has the largest position in Express, Inc. (NYSE:EXPR), worth close to $33.4 million, comprising 0.1% of its total 13F portfolio. The second most bullish fund manager is Buckingham Capital Management, managed by David Keidan, which holds a $24.6 million position; the fund has 2.8% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, John Overdeck and David Siegel’s Two Sigma Advisors and Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital.
Since Express has gained popularity during the first quarter, there are some funds that initiated stakes during the first quarter. On the next page, we are going to take a closer look at the funds that added the stock to their equity portfolios during the first quarter. In addition, at the end of this article we will also compare EXPR to other stocks, including Diplomat Pharmacy Inc (NYSE:DPLO), RBC Bearings Incorporated (NASDAQ:ROLL), and Cogent Communications Group, Inc. (NASDAQ:CCOI) to get a better sense of its popularity.
As aggregate interest increased, key hedge funds were breaking ground themselves. Two Sigma Advisors, managed by John Overdeck and David Siegel, initiated the most outsized position in Express, Inc. (NYSE:EXPR). Two Sigma Advisors had $20.6 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also initiated a $12.6 million position during the quarter. The following funds were also among the new EXPR investors: Peter Muller’s PDT Partners, Neil Chriss’s Hutchin Hill Capital, and Steve Cohen’s Point72 Asset Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Express, Inc. (NYSE:EXPR) but similarly valued. These stocks are Diplomat Pharmacy Inc (NYSE:DPLO), RBC Bearings Incorporated (NASDAQ:ROLL), Cogent Communications Group, Inc. (NASDAQ:CCOI), and Texas Capital Bancshares Inc (NASDAQ:TCBI). All of these stocks’ market caps are closest to EXPR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DPLO | 12 | 60054 | -5 |
| ROLL | 4 | 72881 | -1 |
| CCOI | 12 | 186468 | -4 |
| TCBI | 18 | 200598 | 3 |
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $130 million. That figure was $245 million in EXPR’s case. Texas Capital Bancshares Inc (NASDAQ:TCBI) is the most popular stock in this table. On the other hand, RBC Bearings Incorporated (NASDAQ:ROLL) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Express, Inc. (NYSE:EXPR) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
