Voss Capital's flagship long/short equity strategy, the Voss Value Fund, returned 23.3% to investors net of fees and expenses in the first quarter of 2021. Q1 2021 hedge fund letters, conferences and more According to a copy of the firm's first-quarter investor letter, which ValueWalk has been able to review, the Texas-based asset manager's gross Read More
- US: Dow: 13008.70 (-0.49%), S&P 500: 1379.33 (-0.43%), NASDAQ: 2939.52 (-0.21%)
- Europe: CAC: 3291.66 (-0.88%), DAX: 6772.26 (-0.03%), FTSE: 5635.28 (-1.04%).
- Asia-Pacific: Australia: 4269.20 (0.55%), China: 2103.63 (-0.30%), Hong Kong: 19796.81 (1.07%), India: 5229.00 (0.56%), Japan: 8695.06 (0.69%).
- Metals: Gold: 1610.50 (-0.57%), Silver: 27.91 (-0.42%), Copper: 3.42 (0.04%)
- Energy: Crude Oil: 88.06 (-1.92%), Natural Gas: 3.21 (-0.16%)
- Commodities: Corn: 8.05 (-1.07%), Soya Bean: 16.41 (-0.15%), Wheat: 9.02 (-2.67%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2304 (-0.37%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5677 (0.21%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.1150 (-0.05%)
- 10 year US Treasury: 1.473% (-0.029)
Market and Economy News Update
U.S. markets end lower: U.S. markets closed lower on Tuesday after another tepid session as investors await the Federal Reserve policy decision tomorrow and news from the European central bank later this week. The Dow Jones Industrial Average (INDEXDJX:.DJI) lost 64.33 points, or 0.49 percent, to close at 13008.68. The S&P 500 (INDEXSP:.INX) lost 5.98 points, or 0.43 percent, to close at 1379.33, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) lost 6.32 points, or 0.21 percent, to end at 2939.52. The Dow added 1 percent in July, S&P gained 1.3 percent during the month and NASDAQ edged up 0.15 percent.
Oil prices fall: Oil prices declined for the second consecutive day as investors speculated that the U.S. Federal Reserve was unlikely to announce additional stimulus measure this week. Crude oil for August delivery declined 1.9 percent, to settle at $88.06 a barrel on the New York Mercantile Exchange. Brent oil for September settlement fell 1.2 percent to $104.92 a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
· United States Steel Corporation (NYSE:X) posted second quarter earnings excluding items of 69 cents per share that easily beat the average analysts’ estimate of 47 cents per share. The steelmaker, however, warned that third-quarter earnings could decline amid the global economic weakness and lower prices.
· Cummins Inc. (NYSE:CMI) reported second quarter earnings excluding items of $2.45 per share, beating Street estimates of $2.28 per share. Revenue for the quarter came in at $4.45 billion, in line with expectations.
· Edison International (NYSE:EIX) reported second quarter net income of $103 million, or 23 cents a share, compared to $191 million, or 54 cents, a year earlier. Operating revenue for the quarter came in at $3.06 billion, trailing estimates of $3.12 billion.
· Genworth Financial Inc (NYSE:GNW) reported second quarter earnings excluding items of 16 cents per share, lower than the average analysts’ estimate of 18 cents per share. Revenue stood at $2.53 billion, also trailing estimates of $2.56 billion.
· Electronic Arts Inc. (NASDAQ:EA) reported fiscal first quarter adjusted loss of 41 cents a share, on revenue of $491 million. Analysts were expecting a loss of 42 cents a share, on revenue of $502 million. The video-game publisher has also named former Yahoo! Inc. (NASDAQ:YHOO) executive Blake Jorgensen as chief financial officer.
· Business software maker BMC Software, Inc. (NASDAQ:BMC) posted first quarter earnings excluding items of 65 cents per share, on revenue of $504.4 million. Analysts were expecting earnings of 75 cents per share on $521.79 million in revenue.
· The Allstate Corporation (NYSE:ALL) reported second-quarter profit of $423 million, or 86 cents a share, compared to a year-ago loss of $624 million, or $1.19 a share. Revenue increased 2.4 percent to $8.28 billion. Operating profit came in at 87 cents a share, topping the average analysts’ estimate of 52 cents per share.
· Biotechnology company Life Technologies Corp. (NASDAQ:LIFE) posted second quarter net profit of $122.3 million, or 67 cents per share, compared with a profit of $95.5 million, or 52 cents per share, in the year ago quarter. The company however lowered its full-year earnings forecast amid tough economic conditions in Europe.
· Auto-parts company Delphi Automotive PLC (NYSE:DLPH) reported second quarter earnings per share of $1.01, topping estimates of 91 cents per share. Revenue declined 5 percent to $4.0 billion from $4.2 billion in the same period last year. The company also lifted its full-year earnings outlook.
· Herbalife Ltd. (NYSE:HLF) posted second-quarter earnings of $133.4 million, or $1.10 per share, on revenue of $1.03 billion. Analysts were expecting earnings of 96 cents on revenue of $978.96 million. The network marketing company also raised its full-year outlook.
· Trucking company Arkansas Best Corporation (NASDAQ:ABFS) ended 12 percent higher after posting better than expected second-quarter earnings and revenue.
· Health insurer Humana Inc. (NYSE:HUM) reported second quarter adjusted earnings of $2.19 per share that missed the average analysts’ estimate of $2.28 per share. Revenue increased 4 percent to $9.7 billion from $9.28 billion in the year-ago quarter, but trailed estimates of $9.86 billion. The company also cut its full-year earnings outlook.
· Coach, Inc. (NYSE:COH), the largest US luxury handbag maker, reported fiscal fourth quarter net income that was slightly above market estimates, but sales missed expectations. Same-store sales rose 1.7% during the quarter, well below what analysts were expecting.
· Home improvement retailer Lowe’s Companies, Inc. (NYSE:LOW) has tabled a $1.76 billion unsolicited offer to buy struggling Canadian retailer, Rona Inc. (TSE:RON). Rona has however rejected the takeover proposal.
· Hospital billing services provider Accretive Health, Inc. (NYSE:AH) has reached a $2.5 million settlement with the state of Minnesota over an ongoing lawsuit that alleged the company adopted unlawful tactics to collect bills from hospital patients.
Hedge Fund News Update
- A majority of investors polled by Credit Suisse said they planned to allocate cash to relative-value credit hedge funds in the third quarter.
- Analysts at investment consulting firm McKinsey & Company, forecast that retail alternative investments, including hedge funds, will constitute 13 percent of U.S. retail fund assets by 2015, up from 6 percent in 2010.
- Hedge-fund manager David Einhorn said General Motors Company (NYSE:GM) and Marvell Technology Group Ltd. (NASDAQ:MRVL) are likely to rebound after underperforming in the second quarter, according to a report in Bloomberg News.
- The $24.4 billion Texas Permanent School Fund has fired fund of hedge funds, K2 Advisors, which managed $392 million for the endowment. Texas Permanent will reallocate K2’s assets to existing managers, Blackstone Alternative Asset Management and Grosvenor Capital Management.
- Glenview Capital, run by former Omega Advisors trader Larry Robbins, has acquired a fresh position in software company, Rovi Corporation (NASDAQ:ROVI), and currently holds a stake of around 7 percent.
- Veteran venture capitalist, Rob Chandra, is planning to launch a $250 million hedge fund, Avid Park. Bessemer Venture Partners’ former India chief has already raised $250 million for the long/short hedge fund, and is currently closed to new investors.
- South Korea’s Financial Services Commission is likely to announce that hedge funds with at least 1 trillion won ($877.2 million) will be able to establish firms in the country. The announcement is part of efforts made by the country’s regulators to attract hedge fund to open shop in the country, news outlet YonHap News Agency reported.
Brokerage Upgrades and Downgrades on Tuesday, July 31, 2012
- BroadSoft Inc (NASDAQ:BSFT) was raised to “buy” from “neutral” by analysts at Goldman Sachs.
- Concho Resources Inc. (NYSE:CXO) was lifted to “outperform” from “market perform” by analysts at Wells Fargo & Co.
- Hudson City Bancorp, Inc. (NASDAQ:HCBK) was raised to “buy” from “neutral” by analysts at Guggenheim.
- Luminex Corporation (NASDAQ:LMNX) was upgraded to “neutral” from “underweight” by analysts at Piper Jaffray.
- Meridian Bioscience, Inc. (NASDAQ:VIVO) was lifted to “neutral” from “underperform” by analysts at Wedbush.
- Nanosphere, Inc. (NASDAQ:NSPH) was raised to “overweight” from “neutral” by analysts at Piper Jaffray.
- Grupo Televisa SAB (ADR) (NYSE:TV) was lifted to “neutral” from “sell” by analysts at Goldman Sachs.
- USANA Health Sciences, Inc. (NYSE:USNA) was raised to “buy” from “hold” by analysts at Canaccord Genuity with a target price of $60.
- Arthur J. Gallagher & Co. (NYSE:AJG) was downgraded to “equal weight” from “overweight” by analysts at Barclays Capital.
- Blackrock Kelso Capital Corp. (NASDAQ:BKCC) was cut to “neutral” from “buy” by analysts at UBS AG.
- Boardwalk Pipeline Partners, LP (NYSE:BWP) was downgraded to “neutral” from “outperform” at Credit Suisse.
- Coach, Inc. (NYSE:COH) was lowered to “neutral” from “overweight” by analysts at Piper Jaffray.
- Dendreon Corporation (NASDAQ:DNDN) was cut to “neutral” from “overweight” by analysts at JPMorgan Chase.
- PMC-Sierra, Inc. (NASDAQ:PMCS) was downgraded to “hold” from “buy” by analysts at Jefferies Group.
- CafePress Inc (NASDAQ:PRSS) was downgraded by analysts at JPMorgan Chase from “overweight” to “neutral” with a target price of $13.
- Southwestern Energy Company (NYSE:SWN) was cut by analysts at Capital One from “overweight” to “neutral.”
- Tessera Technologies, Inc. (NASDAQ:TSRA) was lowered to “underperform” from “neutral” by analysts at Bank of America.
- UNS Energy Corp (NYSE:UNS) was downgraded by analysts at DA Davidson from “but” to “neutral.”
Earnings Calendar for Wednesday, August 01, 2012
Before market open:
Automatic Data Processing (NASDAQ:ADP)
Allergan, Inc. (NYSE:AGN)
Avon Products, Inc. (NYSE:AVP)
Comcast Corporation (NASDAQ:CMCSA)
Dominion Resources, Inc. (NYSE:D)
Devon Energy Corporation (NYSE:DVN)
Exelon Corporation (NYSE:EXC)
AGL Resources Inc. (NYSE:GAS)
Harley-Davidson, Inc. (NYSE:HOG)
Hospira, Inc. (NYSE:HSP)
IntercontinentalExchange Inc (NYSE:ICE)
Mastercard Inc (NYSE:MA)
RR Donnelley & Sons Company (NASDAQ:RRD)
Time Warner Inc. (NYSE:TWX)
During market hours:
American Tower Corp (NYSE:AMT)
Phillips 66 (NYSE:PSX)
Wisconsin Energy Corporation (NYSE:WEC)
After market close:
DaVita Inc. (NYSE:DVA)
The Hartford Financial Services Grup Inc (NYSE:HIG)
Lincoln National Corporation (NYSE:LNC)
MetLife Inc (NYSE:MET)
MURPHY OIL CORPORATION (NYSE:MUR)
Prudential Financial Inc (NYSE:PRU)
Tesoro Corporation (NYSE:TSO)
Unum Group (NYSE:UNM)
Williams Companies, Inc. (NYSE:WMB)
Time not specified:
Marathon Oil Corporation (NYSE:MRO)