Sea is a consumer internet company based in Asia that serves customers worldwide through its three core businesses: Garena, Shopee, and SeaMoney. Sea uses an integrated internet platform consisting of e-commerce, digital entertainment content, payment processing, and digital financial services. Sea has undoubtedly benefited from a shift in consumer habits during the coronavirus pandemic that increased online purchases and gaming frequency.

Hedge Funds and Institutions Are Buying

Sea has captured the gaze of hedge fund managers and institutions. Looking at activity by the top hedge funds in the fourth quarter, the aggregate 13F shares held increased to about 80.6 million from 72.5 million, an increase of approximately 11.1%. Of the hedge funds, 44 created new positions, 61 added to existing holdings, 23 exited, and 64 reduced their stakes. Institutions were also buying, as aggregate holdings increased by about 8.7% to approximately 262.2 million from 241.3 million.

(WhaleWisdom)

Positive Multi-year Estimates

Analysts expect to see revenue rise over the next few years, with year-over-year growth ranging between 30.6% and 79.3% between 2021 and 2023. This growth could amount to revenue of approximately $14.2 billion in 2023, up from $7.9 billion in 2021. Earnings forecasts are also optimistic, rising to $0.51 per share by December 2023, up from a loss of $2.13 for 2021.

(WhaleWisdom)

Ratings Rise with Favorable Forecasts

CLSA Ltd. analyst Marcus Liu remained bullish on Sea’s long-term prospects and upgraded the equity to Buy with an unchanged price target of $275. Analyst Zhiwei Foo of Macquarie Investment Management also upgraded the stock to an Outperform from Neutral rating. Foo enthusiastically raised Sea’s price target to $280 from $124, noting that the digital finance business is an area of under-valuation.

Positive Outlook

Sea’s phenomenal year of growth and future potential are encouraging factors for investors. Sea’s business model meets the growing demand of shoppers for online payment and entertainment options. At the same time, opportunities for continued future growth offer an attractive entry point for new investors.

Moving Up The Heatmap

Hedge funds were buying the stock in the first quarter, helping Microsoft to elevate itself on the WhaleWisdom HeatMap by rising to 11 from a previous ranking of 15. As an established provider of software products and services, Microsoft appears to have been minimally affected by the Coronavirus pandemic. In contrast, many other companies and industries have seen a negative impact. It is certainly understandable that Microsoft’s value would remain strong during a time when businesses have been driven to increase remote work and online collaboration dramatically. Educational institutions have been forced to implement remote learning, and even video games have garnered more attention as a variety of ages look for additional entertainment outlets within the safety of their homes.

(WhaleWisdom Heatmap)

Hedge Funds Are Active

Hedge funds were buying in the first quarter, as aggregate 13F shares increased to approximately 1.84 billion from around 1.76 billion, an increase of about 4.5%. In slight contrast, institutions saw a mild decrease of about 2.8%, with the aggregate 13F shares, held decreasing to approximately 5.3 billion from 5.5 billion. Overall, 79 hedge funds created new positions, 231 added to an existing one, 21 closed out their stakes, and 303 reduced their holdings.

(WhaleWisdom)

Favorable Forecasts

Microsoft’s business outlook for June 2020 is favorable, with analysts estimating revenue to grow by about 12.4% year over year growth. The company’s earnings are also encouraging, with earnings per share estimates of $5.69 for 2020, and expectations for future growth to span from about 9.1% to 21% over the next three fiscal years.

Analysts have a favorable outlook for the company, raising price targets. Wells Fargo & Co. recently lifted its twelve-month price target on Microsoft to $250. Baird & Co. is also positive on the company partly due to the big success of Microsoft Teams in facilitating remote collaboration.

Positive Outlook

2020 has begun well for Microsoft. To date, the company has weathered the Coronavirus storm and continued to support its customers as they adapt to a world with more remote focused business and interaction. With its financial track record and potential for growth, there’s an excellent opportunity for hedge funds and institutions to be rewarded.

DexCom is a medical device company focused on the development, manufacturing, and distribution of glucose monitoring systems for diabetes management. The company has received positive attention from diabetes patients due to DexCom’s G6 continuous glucose monitoring (CGM) system.

Making the Index

Given DexCom’s impressive performance, it is not surprising that the stock was added to the WhaleWisdom WhaleIndex 100. DexCom has a presence in the healthcare sector, and its latest CGM has appeal for being able to pare to smart devices to send customers alerts and minimize the need for fingersticks. With a healthcare product of this nature, it’s understandable that even the uncertainty of our current stock market has had little impact on DexCom’s value.

(WhaleWisdom)

Institutions Sell, While Hedge Funds Acquire

Institutions overall were selling the stock, but volume was minimal. The number of aggregate 13F shares decreased by approximately 0.9% as of Q1 2020, to roughly 89.4 million from about 90.2 million just three months earlier. For comparison, hedge funds increased their total 13F shares by about 1.7%, up to 35.5 million from 34.9 million.

(WhaleWisdom)

Analysts Share Favorable Forecasts

Citigroup Global Markets, Inc.’s, increased DexCom’s price target to $440 from $361 and maintains a Buy rating on shares, recognizing that the demand for new technology in diabetes management is high. Piper Sandler raised their price target to $450 from $375, while keeping an Overweight rating on the shares.

DexCom has seen its earnings rise in recent years, and now analysts are forecasting a significant increase in year-over-year growth for 2020, rising 51.9% to $2.17 per share. Meanwhile, revenue is forecast to grow by over 22% in 2020 to $1.79 billion.

Promise Lies Ahead

While DexCom isn’t cheap, trading for 121 times 2021 earnings estimates, there continues to be strong demand for the shares. DexCom’s climb onto the WhaleWhisdom Index supports this demand and gives hope for a sustained move higher. However, it should be noted that the restrictions on non-essential healthcare services during the Coronavirus pandemic have had a slightly negative impact on the volume of new customers for DexCom, but this is viewed as temporary. DexCom appears to have positioned itself to continue forward momentum through and beyond the pandemic. Current investors will likely maintain their stakes in DexCom, with new investors to come.

Hedge funds were actively buying the stock in the first quarter, even ahead of recent months’ impressive strides on the WhaleWisdom Heatmap. At a time when many companies are struggling amidst the coronavirus pandemic and its impact on the economy, Amazon has benefitted from customers’ heightened needs and even panic buying of essentials such as toilet paper, hand sanitizer and food. While Amazon has seen disruption to its supply chain, often causing delays in getting products out, customer demand has not waivered.

Institutions and Hedge Funds Are Active

Amazon saw its position on the WhaleWisdom Heatmap in the first quarter of 2020, move up to 5 from 22. The rate of institutions buying the stock was almost twice that of those selling. During the quarter, the aggregate 13F shares held by institutions increased to approximately 355.9 million from 280.1 million, an increase of about 27.1%. The total 13F shares held by hedge funds increased to about 100.2 million from 91.7 million, an increase of almost 9.3%.

(WhaleWisdom)

Favorable Estimates

Analysts forecast strong growth in 2020 and estimate that earnings will fall by 18% to $18.85 per share, despite revenue rising by 23% to $345 billion. However, earnings are forecast to accelerate in 2021, by more than double to $37.48 per share, driven by strong revenue growth, which is estimated to increase by 18% to $406.6 billion.

Analysts have a favorable outlook for Amazon, raising price targets across the board. JPMorgan Chase & Co.’s raised Amazon’s price target to $3,000 from $2,525, while keeping an Overweight rating on the shares. Deutsche Bank raised its price target to $2,750 from $2,300, while maintaining a Buy rating. Finally, Susquehanna raised Amazon’s price target to $3,000 from $2,500, keeping a Buy rating on the shares.

Bright Outlook

With the current health pandemic and governmental restrictions closely intertwined to most Americans’ lives, there continues to be a rising trend in purchases from this e-commerce company. As top analysts have suggested, investors have reason to keep their faith in Amazon’s growth potential and continue to enjoy the ride.

Strong Results Despite Global Tensions

JD had an impressive rise in the WhaleWisdom Heatmap in the first quarter, with a ranking at one. Despite JD’s forward movement and growth in this challenging stock market, JD’s ties to China leave it partially influenced by the recent rising U.S.-China tensions related to the pandemic. While arguments over blame for the coronavirus have not had a significant impact on Wall Street, the debate and tension have nevertheless hung over the market and remains a concern for some investors.

Still, JD’s strong ranking and position on the WhaleWisdom Heatmap may be a reason for hope for the stock’s future.

(WhaleWisdom)

Institutions Are Buying

Institutions overall were buying the stock, with the number of aggregate 13F shares increasing by approximately 12.4% as of March 31, 2020, to roughly 284.2 million from about 253 million just three months earlier. For comparison, hedge funds increased their total 13F shares by about 2.9%, up to 613.7 million from 596.3 million.

(WhaleWisdom)

Analysts’ Forecast Are Favorable

AllianceBernstein Holding LP increased JD’s price target to $60 from $55. However, Bernstein is not the only one with faith that the stock will go higher, as many Wall Street analysts are bullish on the stock. Overall, 30 analysts cover the stock with an average price target of $58.08, or 16.4% higher than the equity’s price on May 22.

Currently, analysts estimate second-quarter earnings per share of about $0.35, an increase of 8% versus a year ago. Meanwhile, analysts forecast revenue of about $26.6 billion, an increase in year over year growth of approximately 24.8%. JD has seen active customer accounts rise, with a significant increase in daily monthly mobile users in March, up about 46% year-over-year.

Sustained Growth

JD has been fortunate to see benefits from coronavirus-related demand for online shopping. While JD is not cheap on a PE basis, and political tensions between the US and China remain, there is potential for sustained growth for the company. JD’s stock may still garner the attention of investors due to the longer-term potential for payoff.

Roku has one of the top TV streaming platforms in the U.S., and as such, has felt the impact of the recent COVID-19 pandemic, much like its competitors. In recent weeks, Roku’s stock has jumped, likely due to a growing demand for programming by consumers who are following government advisories and mandates to “stay at home.”

Institutions Are Buying

Institutions overall were buying the stock, with the number of aggregate 13F shares increasing by approximately 5.6% as of December 31, 2019, to roughly 65.7 million shares from 62.2 million shares three months earlier. Roku saw positive hedge fund activity, as they increased their total 13F shares by about 12.3%, bringing shares up to approximately 25.1 million from 22.3 million.

Overall, 25 hedge funds created new positions, with 31 adding to existing ones, 31 closing out their holdings, and 31 reducing their stake. Also, Roku had a favorable fourth quarter heat map rating of twenty.

Disappointing Estimates though Analysts Are Bullish

Despite a recent upturn in the stock, there appears to be a reason for cautious optimism. Roku’s earnings before interest, taxes, depreciation, and amortization (EBITDA) are estimated to decrease by approximately $34.1 million for 2020. And yet, Roku saw its most significant growth in weeks with an approximately 15% increase. Roku anticipates continued increases in new accounts and streaming hours, which could explain positive actions by investment firms, despite COVID related hits to the advertising market. Berenberg Bank initiated coverage of the company with a buy rating, and Rosenblatt Securities maintained its buy rating.

Hopeful Outlook

While downturns in the advertising market have understandably negatively impacted Roku, these are viewed as short-term. Roku has recently seen a rise in value as viewer trends change for Roku’s benefit in response to COVID-19 related lifestyle adaptations. There’s reason to believe that many of the new customers will remain once the pandemic dust settles, even if viewing hours may decline. Bullish investors and analysts are in Roku’s corner.

Shares of the oil and natural gas company have fallen dramatically this year due to the sharp drop in crude oil prices, as tensions between Saudi Arabia and Russia escalate. But still, the shares have also seen interest decline as investors turn towards more environmentally friendly companies. It could be one reason why the stock slipped on the WhaleWisdom Heatmap in the fourth quarter.

Institutions Are Selling

Exxon Mobil fell on the WhaleWisdom Heatmap to 294 from 13 in the previous quarter. Institutions overall were selling the stock, with the number of aggregate 13F shares decreasing by 0.58% as of December 31, 2019. Turning to hedge fund activity, 108 added to an existing position as 183 reduced their holdings.

(WhaleWisdom)

Downgraded Ratings Won’t Stop a Rally

There’s an expectation by many investment firms and analysts that Exxon Mobil’s business will be understandably challenged this year. RBC Wealth Management downgraded the stock to Underperform from Sector Perform last month, reducing its price target to $40 from $55. Additionally, cash flow and leverage measures have fallen below S&P Global’s expectations, resulting in its credit rating, falling to AA from AA+. However, despite a bearish outlook for Exxon Mobil, the stock has rallied some in recent days as expectations of the price war for oil eases.

Overall, the average analysts’ price target on the stock has fallen in recent weeks to $45.65, which is roughly 16.4% higher than the stock’s price on April 4. Still, 15 of the 23 analysts rate the shares a hold.

Long-Term Viewpoint

Institutions and hedge funds are moving away from the stock due to a weak and uncertain outlook. However, as most investors are also consumers of Exxon Mobil’s products, they may feel conflicted, as if they’re part of the awkward dance. While falling oil and gas prices may be useful for the consumer, they’re bad for the investor. However, patient investors with a long-enough time frame may stand to benefit, as a few bruised toes may be worth it for the potential long-term dance.

FedEx reported weak results in March, due to soft economic conditions amid the Coronavirus pandemic, higher ground costs from expanded service offerings, while cutting ties with a significant customer.  Still, FedEx beat earnings per share estimates by $0.14 and revenue estimates by $800 million.

Uninspiring Change

(WhaleWisdom)

Hedge funds’ and institutions’ fourth quarter activity was uninspiring.  During the quarter, the aggregate 13F shares for institutions increased by about 2.1%, to roughly 187.9 million from 183.9 million three months earlier. However, there were 700 institutional sellers and just 480 institutional buyers of the stock during that period. Also, hedge funds similarly increased their total 13F shares held by 2.5% in the fourth quarter, up to 52 million from 50.8 million. But there were 117 sellers of the stock, to only 83 buyers.

(WhaleWisdom)

Better Estimates for 2021

Analysts estimate that revenue will decline by approximately 0.9% in 2020 to $69.1 billion, and later increase by about 3.0% in 2021.  Meanwhile, earnings are forecast to drop by 38.9% in 2020 to $9.51 per share, with a modest 17% rebound in 2021.

Analysts Cut Price Targets

Despite the long-term promise, analysts have been lowering their price targets on the stock.  BMO Capital Markets lowered its price target to $115 from $150, while maintaining a Market Perform rating.  Also, Goldman Sachs lowered its price target to $153 from $175, while retaining a Conviction Buy rating.

A slightly optimistic view comes from Baird, which notes that the stock is positioned for an economic recovery once the Coronavirus is contained.  The firm maintained its price target of $140 as well as an Outperform rating.

Bearish Market with a Glimmer of Hope

Despite the past year’s downward trend, analysts appear to have some hope.  While there’s an expectation of a slowdown in global shipping activity, and currently a negative business impact from the Coronavirus, the future containment of the virus brings with it an opportunity for financial recovery.  For the brave investor that’s not deterred by the market drop or choppy seas, it may be worthwhile to ride out the storm.

Netflix is an American streaming media service provider and production company with domestic and international segments.  The company has had continued success due to its ability to adapt to customer needs and shift its business model.  It’s not surprising that the stock is ranked at six on the WhaleWisdom Heatmap.

Positive Movement

Netflix moved to six on the WhaleWisdom Heatmap v2.0, up from 35 during the fourth quarter of 2019.  While 15 filers have decreased their positions, 16 filers have increased their holdings, and the stock has landed in the top ten holdings among these top hedge funds 18 times.

 (WhaleWisdom)

Hedge Funds Maintain Interest

While aggregate 13F shares decreased slightly in the fourth quarter of 2019, interest remained and helped it to climb to a position of 37 from 135 on the original WhaleWisdom Heatmap.  During that quarter, the aggregate 13F shares held by hedge funds increased to approximately 121.1 million from 117.7 million, about a 2.9% increase.  The institutional activity was not quite as favorable, seeing a decrease of about 0.1%, with the aggregate 13F shares held decreasing to approximately 353.4 million from 353.7 million.  Looking at hedge fund activity, 47 created new positions, 83 added to existing ones, 34 exited, and 124 reduced their holdings.

(WhaleWisdom)

Promising Predictions

Analysts’ estimates are encouraging, with sales predicted to grow about approximately 20.9% in 2020 and by 18.6% in 2021.  Meanwhile, earnings are forecast to grow by 45.4% to $6.00 in 2020 and 39.9% in 2021 to $8.40.

Analysts See a Silver Lining

In addition to positive outlooks for the current and coming year, analysts also see a silver lining to business and market disruptions caused by the current global Coronavirus pandemic.  Analyst Justin Patterson, of Raymond James Financial, is one of the optimists.  The analyst notes that as customers stay home amid virus risk, they’re looking to companies like Netflix for online entertainment.  The considerable increase in usage may cause service disruption, but Patterson views temporary disruptions as manageable, while lengthy interruptions could prove problematic to Netflix’s value.

Favorable Outlook

There’s optimism for sales growth estimates, and in general, the stock has been moving in the right direction.  Netflix is a global streaming media powerhouse, and, understandably, there’s been a mixed movement in hedge funds’ positions given the overall market volatility amid the Coronavirus pandemic.  However, what is worth repeating is that Netflix has the potential for some benefit from the effects of the pandemic and, more importantly, has performed relatively well during a time of market volatility.

Performance Has Outpaced the S&P 500

Kroger has performed better than the S&P 500 over the past year, with its value increasing by approximately 24.1% as of March 13, 2020, in stark comparison to the S&P 500’s decrease of 3.5%.  Hedge funds have demonstrated faith in the stock and were buying shares during the fourth quarter as well.

Kroger Added to Berkshire’s Portfolio

Warren Buffett has shown a strong interest in Kroger by not only adding it as a new holding but also by being one of the top holders of the company’s stock.  During the fourth quarter, Buffett bought 18.9 million shares of the shares, a market value of $550 million.  It puts his firm among the top 10 holders of the stock.

(WhaleWisdom)

Hedge Funds Are Buying

Hedge Funds were also buying the stock, with the number of aggregate 13F shares increasing by approximately 3.4%, to roughly 229.5 million shares from 221.9 million shares as of December 31, 2019.   Looking at the top hedge funds, 21 created new positions, 35 added to an existing position, and 59 reduced their holdings, as 20 exited.

(WhaleWisdom)

Continued Growth Is Anticipated

Kroger is not an expensive stock and trades with a price to earnings ratio of 12 based on fiscal 2022 earnings estimates.  Sales are expected to grow by approximately 2.0% in both 2020 and 2021, while earnings are predicted to grow to $2.36 per share in 2020 and $2.46 per share in 2021.  Projections continue upward for 2022, with sales growth estimated at 2.2% and earnings estimated to climb to $2.57 per share.

Steady Momentum Attracts Investors

While sales growth estimates are modest, the stock keeps moving in the right direction.  Kroger is one of the United States’ largest grocery chains, and bullish investors see a real potential for payoff.  Understandably, hedge funds have held and added to positions, as the stock has outpaced the S&P 500 and garnered the attention of some well-known investors.  Then factor in recent peaks in consumer demand related to U.S. pandemic concerns, and you have an even higher likelihood of sales growth and happy investors.