Welcome to our latest issue of ValueWalk’s hedge fund update. Below subscribers can find an excerpt in text and the full issue in PDF format. Please send us your feedback! Featuring Point72 Asset Management losing about 10% in January, Millennium Management on a hiring spree, and hedge fund industry's assets under management swell to nearly Read More
- US: Dow: 12878.90 (-0.71%), S&P 500: 1365.00 (-0.74%), NASDAQ: 2909.77 (-0.36%)
- Europe: CAC: 3232.46 (-2.76%), DAX: 6606.09 (-2.25%), FTSE: 5662.30 (-0.89%).
- Asia-Pacific: Australia: 4269.50 (0.16%), China: 2111.18 (-0.58%), Hong Kong: 19690.20 (-0.66%), India: 5227.75 (-0.24%), Japan: 8653.18 (0.13%).
- Metals: Gold: 1590.70 (-1.03%), Silver: 27.00 (-1.96%), Copper: 3.29 (-2.50%)
- Energy: Crude Oil: 87.13 (-2.00%), Natural Gas: 2.92 (-7.92%)
- Commodities: Corn: 7.95 (-0.59%), Soya Bean: 16.16 (-0.77%), Wheat: 8.79 (-1.59%)
- Currency: Euro (€) / US Dollar ($) (EURUSD): 1.2178 (0.43%), British Pound Sterling (UK£) / US Dollar ($) (GBPUSD): 1.5509 (0.18%), US Dollar ($) / Japanese Yen (¥) (USDJPY): 78.2150 (-0.26%)
- 10 year US Treasury: 1.478% (-0.046)
Market and Economy News Update
U.S. markets end lower: U.S. markets closed lower for the fourth day on Thursday, but managed to rebound from lows made earlier in the day, amid investor disappointment with the European Central Bank’s response to the region’s debt crisis. The Dow Jones Industrial Average (INDEXDJX:.DJI) lost 92.18 points, or 0.71 percent, to close at 12878.88. The S&P 500 (INDEXSP:.INX) dropped 10.14 points, or 0.74 percent, to end at 1365.00, while the NASDAQ Composite (INDEXNASDAQ:.IXIC) shed 10.44 points, or 0.36 percent, to close at 2909.77.
Oil prices fall: Oil prices declined after the European Central Bank disappointed investors, and U.S. factory orders unexpectedly dropped in June. Crude oil for September delivery fell 2 percent, to settle at $87.13 a barrel on the New York Mercantile Exchange. Brent oil for September settlement lost 6 cents to $105.9o a barrel on the London-based ICE Futures Europe exchange.
Stocks in Focus
· American International Group, Inc. (NYSE:AIG) posted second-quarter earnings excluding items of $1.06 per share that easily beat consensus estimate of 57 cents a share, amid strong growth at its Chartis and SunAmerica divisions.
· CBS Corporation (NYSE:CBS) reported second quarter earnings per share of 65 cents that beat the average analysts’ estimate of 59 cents per share. Sales declined 3 percent to $3.48 billion, missing estimates the $3.53 billion
· Kraft Foods Inc (NASDAQ:KFT) reported second-quarter earnings excluding items of 68 cents per share, on revenue of $13.29 billion. Analysts were expecting earnings of 66 cents per share on revenue of $13.96 billion. The food company stood by its full-year earnings and revenue targets.
· Video game publisher Activision Blizzard, Inc. (NASDAQ:ATVI) posted second quarter adjusted earnings of 20 cents per share, against analysts’ estimates of 12 cents per share. Revenue for the quarter stood at $1.08 billion, also topping expectations. The company, a unit of French media conglomerate Vivendi SA (EPA:VIV), also raised its full year outlook.
· Pitney Bowes Inc. (NYSE:PBI) reported second quarter earnings excluding items of 52 cents a share, 3 cents above estimates. Revenue fell 5.2 percent to $1.25 billion, in line with Street estimates. The mail and document services company lowered its full-year outlook.
· Duke Energy Corp (NYSE:DUK) reported second quarter earnings excluding one-time items of $1.02 per share that beat estimates of 97 cents per share. Revenue for the quarter came in at $3.58 billion that missed market expectations of revenue of $4.25 billion.
· Kellogg Company (NYSE:K) posted second quarter earnings excluding special items of 89 cents per share, on revenue of $3.47 billion that beat the average analysts’ estimate of earnings of 85 cents per share on revenue of $3.38 billion. The cereal and snacks maker reiterated its full-year earnings forecast.
· Xylem Inc (NYSE:XYL) reported second quarter earnings excluding items of 49 cents per share on revenue of $966 million. Analysts were expecting earnings of 48 cents a share on revenue of $992 million. The water-equipment company also cut its full-year earnings and revenue forecast.
- Och-Ziff Capital Management Group LLC (NYSE:OZM) reported second quarter distributable earnings of 15 cents a share, topping Street estimates by 2 cents a share. As of June 30, assets under management stood at $29.3 billion, down from $30.1 billion on March 31. Och-Ziff increased its quarterly dividend by 40 percent from 10 cents a share to 14 cents a share.
- New York-based Fortress Investment Group LLC (NYSE:FIG) reported second quarter pre-tax distributable earnings of $50 million, or 9 cents per share, in line with consensus estimate. Total assets under management stood at $47.8 billion, as of June 30, up 3 percent from $46.4 billion on March 31. The asset manager announced a second-quarter dividend of 5 cents a share.
- Outsourcing company, Genpact Limited (NYSE:G) said private equity firm Bain Capital Partners LLC has agreed to buy 30 per cent stake in the company for $1 billion.
- Bristol Myers Squibb Co. (NYSE:BMY) ended 8.6 percent lower after one of its executives, Robert Ramnarine, was arrested by federal authorities on charges of insider trading. Earlier, the New York drug maker said it had suspended trials of its hepatitis C drug after a patient suffered heart failure.
- Teen retailer Aeropostale, Inc. (NYSE:ARO) plunged 33 percent after cutting its full-year outlook, and reporting lower than expected second quarter revenue, and a one percent drop in same-store sales.
- Weight Watchers International, Inc. (NYSE:WTW) fell 12.6 percent after it slashed its full-year earnings forecast, citing slower enrollment. The New York-based provider of dieting services said second quarter earnings declined to $77.5 million, or $1.36 cents per share, for the quarter ended June, from $87 million, or $1.17 cents per share, a year earlier.
Hedge Fund News Update
- Tiberius Asset Management AG’s head of portfolio management, Thomas Benedix, resigned after its flagship Commodity Alpha OP fund declined 8.2 percent this year through June.
- Following a disappointing second-quarter, the average hedge fund gained 0.96 percent in July, according to the Credit Suisse Liquid Alternative Beta Index.
- British money managers, Schroders plc (LON:SDR) and Sloane Robinson have decided to liquidate the Schroder GAIA Sloane Robinson Emerging Markets fund, after assets under management fell to $85 million, following a sustained period of redemptions.
- Bob McDonald, chief executive of The Procter & Gamble Company (NYSE:PG), will try to put forward his plans to turn around the consumer products giant, in his first public comments since Bill Ackman and his hedge fund, Pershing Square Capital Management, took a stake in the company. P&G will report fourth quarter results on Friday morning, which will be followed by a conference call.
- JANA Partners LLC’s flagship JANA Master Fund Ltd managed to post a return of 11.2 percent for the year to date period ending June 30, against a gain of 9.5 percent in the S&P 500 (INDEXSP:.INX).
Brokerage Upgrades and Downgrades on Thursday, August 02, 2012
- Electronic Arts Inc. (NASDAQ:EA) was raised to “buy” from “neutral” by analysts at Bank of America.
- First Solar, Inc. (NASDAQ:FSLR) was lifted to “outperform” from “neutral” by analysts at Robert W. Baird with a target price of $30.
- Ignite Restaurant Group Inc (NASDAQ:IRG) was raised to “strong buy” from “outperform” by analysts at Raymond James.
- ManTech International Corp (NASDAQ:MANT) was upgraded to “market perform” from “underperform” by analysts at Wells Fargo & Co.
- Marathon Oil Corporation (NYSE:MRO) was raised to “accumulate” from “neutral” by analysts at Global Hunter Securities with a target price of $31.
- Ralcorp Holdings, Inc. (NYSE:RAH) was lifted to “outperform” from “neutral” by analysts at Credit Suisse.
- Red Lion Hotels Corporation (NYSE:RLH) was lifted to “neutral” from “underperform” by analysts at Robert W. Baird with a target price of $7.
- SurModics, Inc. (NASDAQ:SRDX) was raised to “buy” from “hold” by analysts at Feltl & Co. with a target price of $20.
- Titanium Metals Corp (NYSE:TIE) was upgraded to “overweight” from “neutral” by analysts at JPMorgan Chase.
- Agrium Inc. (USA) (NYSE:AGU) was downgraded to “hold” from “buy” by analysts at Dahlman Rose.
- Abercrombie & Fitch Co. (NYSE:ANF) was cut to “neutral” from “buy” by analysts at Bank of America.
- DryShips Inc. (NASDAQ:DRYS) was downgraded to “hold” from “buy” at Deutsche Bank.
- Fresenius Medical Care AG & Co. (ADR) (NYSE:FMS) was lowered to “neutral” from “overweight” by analysts at HSBC.
- Knight Capital Group Inc. (NYSE:KCG) was cut to “sell” from “buy” by analysts at CLSA.
- Kinross Gold Corporation (USA) (NYSE:KGC) was downgraded to “hold” from “buy” by analysts at Stifel Nicolaus.
- MGM Resorts International (NYSE:MGM) was downgraded by analysts at Bank of America from “buy” to “neutral.”
- Potash Corp./ Saskatchewan (USA) (NYSE:POT) was cut by analysts at Dahlman Rose from “buy” to “hold.”
- Stryker Corporation (NYSE:SYK) was lowered to “neutral” from “overweight” by analysts at Piper Jaffray.
- Washington Banking Company (NASDAQ:WBCO) was downgraded by analysts at FIG Partners from “outperform” to “market perform.”