Earnings Season! Top 3 Hedge Fund Favorites Reporting This Week

Earnings season is in full swing, and this week is seeing a lot of the action. Over 500 companies are reporting in the week, including big names such as Exxon Mobil, Amazon, Eli Lilly, and Qualcomm.

When companies report their quarterly earnings, it is usually a big mover for stock prices. Whenever there is a mismatch between expectations and the actual performance, stocks will usually price in the difference immediately.

For ideas on how to create your own watch list this earnings season, we ran a screen on this week’s reporting companies.

We screened these stocks for those with the greatest buying attention from the “smart money,” i.e. institutional investors and company insiders.

Institutional investors, such as hedge fund managers and mutual fund managers, have a lot of experience and access to sophisticated research, so when they report buying shares of a company, investors and analysts pay attention.

In the same way, when company insiders, such as members of the board and upper management, report that they buy company shares, it is viewed very positively by the market because who knows their company better than they do?

Business Section: Investing Ideas

Below is the final list of stocks from our screen on this week’s reporting companies. These stocks have seen significant net institutional purchases over the current quarter as a percent of share float, as well as significant net insider purchases over the last six months, also expressed in terms of share float.

Do you think the smart money is calling it right on these names? Will they report positive earnings surprises this week?

Interactive Chart: Use the Compar-O-Matic to compare analyst ratings for all the stocks mentioned below:

List sorted by net insider purchases as a percent of share float.

1. Infinera Corporation (INFN, Earnings, Analysts, Financials): Provides optical networking systems based on photonic integration technology in the United States. Market cap of $791.39M. Earnings to be announced on Feb 2. Net insider shares purchased over the last six months at 200K, which is 0.19% of the company’s 103.23M share float. Net institutional shares purchased over the current quarter at 5.5M, which is 5.33% of the company’s 103.23M share float.

2. Niska Gas Storage Partners LLC (NKA, Earnings, Analysts, Financials): Operates natural gas storage assets in North America. Market cap of $739.69M. Earnings to be announced on Feb 2. Net insider shares purchased over the last six months at 24.90K, which is 0.14% of the company’s 17.45M share float. Net institutional shares purchased over the current quarter at 883.1K, which is 5.06% of the company’s 17.45M share float.

3. Affymetrix Inc. (AFFX, Earnings, Analysts, Financials): Engages in the development, manufacture, sale, and servicing of consumables and systems for genetic analysis in the life sciences and clinical healthcare markets. Market cap of $328.39M. Earnings to be announced on Feb 2. Net insider shares purchased over the last six months at 65.0K, which is 0.12% of the company’s 56.19M share float. Net institutional shares purchased over the current quarter at 3.6M, which is 6.41% of the company’s 56.19M share float.

(List compiled by Alexander Crawford)

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