Why Merck, Whole Foods Market & Other Stocks Are in Spotlight Today?

The US Stock market is trading higher on Thursday, helped by a 3% growth in Brent and WTI. Meanwhile, the earnings season is still in progress and among the companies that have posted their results are Merck & Co., Inc. (NYSE:MRK), Whole Foods Market, Inc. (NASDAQ:WFM), AmerisourceBergen Corp. (NYSE:ABC), Kraft Heinz Co (NASDAQ:KHC), and Tripadvisor Inc (NASDAQ:TRIP). In this article, we are going to take a closer look at the results of these companies and see if the smart money investors have been bullish on them.

We assess the hedge fund sentiment by looking at the equity portfolios of nearly 800 hedge funds and other institutional investors in our database. Aside from identifying how these investors position themselves towards different stocks, we use the data to find the small-cap stocks that these investors are most bullish on and use these stocks to model our strategy (see more details here).

Merck & Co., Inc. (NYSE:MRK)’s stock is almost 2% in the red, after the company posted first-quarter EPS of $0.89, which beat the estimates of $0.85, but the revenue of $9.31 billion was lower than the expected $9.46 billion. The company’s sales were affected by the advancement of competing generic drugs and currency fluctuations. For the full year, Merck & Co., Inc. (NYSE:MRK) expects earnings per share in the range of $3.60 to $3.77, versus the previous forecast of $3.60 to $3.75, while revenue guidance is between $39 billion and $40.2 billion, compared to the previous range of $38.7 billion to $40.2 billion. Among the funds we track, 70 reported long positions in Merck & Co., Inc. (NYSE:MRK) heading into 2016, up by eight on the quarter.

Let’s head to Whole Foods Market, Inc. (NASDAQ:WFM), whose shares are nearly 5% in the green on the back of the company beating the bottom line estimates. The grocer reported adjusted earnings of $0.44 per share on revenue of $3.70 billion, which compares with analysts’ estimates of $0.41 and $3.74 billion, respectively. However, Whole Foods Market had a comparable store sales decline of 3%, higher than the expected fall of 2%. During the fourth quarter, the number of funds bullish on Whole Foods Market, Inc. (NASDAQ:WFM) slid by eight to 25 and the largest stake was reported by billionaire David E. Shaw‘s D. E. Shaw & Co., which owned 2.53 million shares.

On the next page, we are going to discuss the results posted by AmerisourceBergen, Kraft Heinz Co and Tripadvisor.

AmerisourceBergen Corp. (NYSE:ABC) posted fiscal second-quarter EPS of $2.68 on revenue of $35.7 billion, beating the bottom line estimates of $1.59, but missing on the top line projections of $35.83 billion. However, the stock has lost nearly 8% today on the back of AmerisourceBergen Corp. (NYSE:ABC) lowering its full fiscal year EPS guidance to the range of $5.44 to $5.54, versus the previous forecasts of $5.73 to $5.83. The outlook was trimmed due to lower generic pricing trends. A total of 37 funds among those we track held in aggregate around 5.90% of AmerisourceBergen Corp. (NYSE:ABC)’s stock at the end of the last year. In the current round of 13F filings, billionaire Ken Fisher’s Fisher Asset Management reported ownership of 110,647 shares of AmerisourceBergen as of the end of March.

Kraft Heinz Co (NASDAQ:KHC)’s stock has gained 5% following a top-line beat. For the first quarter, Kraft Heinz posted adjusted EPS of $0.73, which were $0.10 higher than expected, while the revenue of $6.50 billion topped the estimates of $6.47 billion.  At the end of 2015, 60 funds tracked by Insider Monkey amassed nearly 30% of Kraft Heinz Co (NASDAQ:KHC)’s outstanding stock, including Warren Buffett‘s Berkshire Hathaway with the lion’s share of the aggregate position, holding a $24 billion stake in the company.

Finally, Tripadvisor Inc (NASDAQ:TRIP)’s stock has seen a roller-coaster ride today and is currently slightly in the red. The company missed both top- and bottom-line analysts’ forecasts by reporting $0.32 in EPS and revenue of $352 million, versus estimates of $0.43 and $370.59 million, respectively. The company posted a 33% annual drop in EBITDA to $85 million, significantly below the expectations of $110.40 million. Yesterday, Priceline Group Inc (NASDAQ:PCLN) lowered its full-year guidance (see article). On the other hand, Nick Danaher of Domando Capital Management pitched Tripadvisor Inc (NASDAQ:TRIP) as a buy, saying that the company’s instant booking service is a game-changer and that the stock could double. A total of 32 funds from the Insider Monkey database held shares of Tripadvisor Inc (NASDAQ:TRIP) at the end of 2015, down by 11 on the quarter, but the aggregate value of their holdings represented around 12% of the company.

Disclosure: none