Cisco Systems, Inc. (CSCO) has had a turbulent start to 2020, but fortunately, performance has improved over the past two months, indicating a potential turn around for the technology company. Cisco serves as one of the biggest manufacturers of Internet Protocol based networking and communication products and has seen a recent jump in demand for its services by companies and their home-bound employees during the COVID-19 pandemic.

The stock fell about 10.4% thus far in 2020, which is slightly worse than the S&P 500’s decline of 9.3%. The stock’s underperformance could be a continuation of selling among institutions that started at the end of 2019.

Cisco is expected to report fiscal third quarter results on May 13, with earnings forecast to fall by approximately 9.3% to $0.70 per share. One bright spot for Cisco this quarter maybe its Webex collaboration as more people worked from home due to the shutdown order by many states due to the coronavirus.

Institutions Are Selling

Cisco has fallen out of favor; looking at the top hedge funds, 141 added to an existing position as 143 reduced their holdings. Institutions overall were selling the stock, with the number of aggregate 13F shares decreasing by approximately 2.6% as of December 31, 2019, to roughly 3 billion from 3.08 billion three months prior. For comparison, hedge funds decreased their total 13F shares to approximately 868.7 million from about 890.2 million.

(Whale Wisdom)

Mixed Views on Cisco

In April 2020, Cisco was downgraded from Overweight to Sector Weight by KeyBanc Capital Markets, Inc. Shortly before this downgrade, Cisco began to experience a surge in its Webex video conferencing platform, a sign of business potential. However, many analysts believe that the uptick in customer usage could ultimately slow. Still, Goldman Sachs Group, Inc. includes Cisco on its list of high yielders with relatively safe dividend payouts.

Hopeful Outlook

While seeing an overall loss in value for the first four and a half months of 2020, Cisco’s rebound in the past two months’ time may just serve as an example of light at the end of the tunnel. Cisco has seen increased demand for its conferencing tools for business meetings; while this may have sparked from forced telecommuting during the health pandemic, the circumstances pulled in a broader audience of customers with the potential for permanence. Investors may see a payoff if the company can hold onto newer pandemic customers and demonstrate the continued value of its services for virtual meetings and workforce versatility.

The Walt Disney Co. (DIS) had a challenging performance over the first four months of 2020, with shares falling by over 27%, compared to the S&P 500 drop of over 12%. Understandably, Disney has been deeply impacted by health and safety concerns, forced business closures, and stay-at-home orders across the United States and around the world, all related to the global COVID-19 pandemic.

However, while the pandemic has certainly hurt Disney’s parks, resorts, and movie production, it has also contributed to an increase in new customers for its new Disney+ streaming service. The entertainment company will next report fiscal second-quarter results on May 5, 2020.

Estimates Reflect an Uncertain Outlook

Analysts estimate second-quarter earnings per share of about $0.90 with a reduction in year over year growth of approximately 44.4% based upon the current period. Overall 2020 estimates are estimated at $2.82, a decline by 51% versus a year ago, while revenue is estimated at approximately $69.8 billion.

Hedge Funds Increased Holdings In The Fourth Quarter

Hedge funds were buying the shares, and during the fourth quarter, the aggregate 13F shares held by hedge funds increased to approximately 349 million from about 347.4 million, an increase of about 0.5%. Of participating hedge funds, 35 created new positions, 176 added to existing positions, 32 closed out their positions, and 177 reduced their holdings.

In contrast to hedge funds’ overall institutions took a small step back, with aggregate 13F shares decreasing to approximately 1.1 billion from about 1.2 billion. Disney now had a Heatmap ranking of 173 in the fourth quarter, down from 119 three months earlier.

(Whale Wisdom)

Lowered Ratings

Disney’s long-term credit rating was lowered to A- at S&P, and then fell off Bank of America’s (BofA) Us 1 List. UBS Group AG downgraded Disney to a Neutral rating from Buy. Many analysts, such as Douglas Mitchelson of Credit Suisse, anticipate increases in Disney’s streaming value and a rebound in the theme park, resort, and Hollywood operations.

Long-Term Potential

While COVID-19 has made making future financial predictions challenging, it’s hard to imagine that Disney will not overcome the downturn and return to strong results once the cloud of the coronavirus pandemic lifts. It is probable that Disney+ business will continue to grow and movie production will eventually resume, and soon. Patient investors are likely to wait it out for business (and economic activity overall) to normalize.

Amazon.com Inc. (AMZN) has had a favorable start to 2020, seeing significant gains in April in particular. Amazon outperformed the S&P 500 in 2020, and as of April 24, rose by approximately 30.4% in comparison to the S&P 500’s loss of about 12.2%.

Amazon has felt the impact of the recent Coronavirus pandemic through hits to its supply chain but also increased demand from customers who require basic staples as well while they follow government advisories and mandates to stay at home. Investors anxiously await to hear final details of first quarter results, as a conference call for this e-commerce and technology company approaches on April 30, 2020.

Rising on The Heatmap

Amazon rose on the WhaleWisdom Heatmap to 19 from 24, showing investors had a positive bias for the stock during the fourth quarter of 2019. Looking at the top hedge funds, 25 added to an existing position as 20 reduced their holdings, as 41 funds held the stock.

(WhaleWisdom)

Institutions Decrease Shares

While hedge funds increased their positions, institutions showed a slight decrease in the stock. The number of aggregate 13F shares decreased by approximately 1.2% as of December 31, 2019, to roughly 274.4 million from 277.6 million three months earlier. For comparison, hedge funds increased their total 13F shares by about 0.4%, up to 91.7 million from 91.3 million.

(WhaleWisdom)

Estimates Are Encouraging for Growth

Amazon’s e-commerce business has experienced both a negative and positive side of the recent Coronavirus pandemic. While Amazon has seen a hit to their supply chain, they have also experienced an increase in demand from customers who require more basic staples as they follow stay-at-home government orders.

While estimates for earnings per share (EPS) is estimated to have declined by about 10% for the first quarter from a year ago, there is still a positive outlook. Quarterly forecast for EPS in 2020 shows a steady rise and are forecast to rise year-over-year by 24.6%.

Analysts Forecast Growth

The upward trend for Amazon is likely to be long-term, based on earnings and revenue estimates. Still, analysts’ perspectives vary. Jefferies Group LLC ‘s analyst, Brent Thill, raised Amazon’s price target from $2,300 to $2,800. Meanwhile, Morgan Stanley acknowledged Amazon as a beneficiary of those working from home during the Coronavirus pandemic and noted in investors should lock in profits at about $2,400 with the stock trading around that price.

Favorable Outlook

While delays in their supply chain have understandably harmed Amazon, these are viewed as short-term and overshadowed by more recent customer trends of buying more from this e-commerce giant. Bullish investors and analysts are likely to stick with this stock.

Roku Inc. (ROKU) has had a challenging start to 2020, though it’s followed the S&P 500’s performance somewhat closely. While Roku experienced a multi-month downward trend in price, more recently, it has seen improvement. As of April 17, Roku’s stock has fallen by 5.3% versus the S&P 500’s decline of about 11%.

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.

Occidental Petroleum Corp. (OXY) has seen a rough start to 2020, displaying a likely downward turn on the WhaleWisdom Heatmap at the end of the first quarter. As of April 10, 2020, Occidental’s stock had decreased by approximately 67.5% in comparison to the S&P 500’s loss of about 17.6% from its 2020 highs.

Approximately eight months earlier, Occidental had acquired Anadarko Petroleum Corp. (APC). This acquisition did result in Occidental taking on more debt, but it also brought the potential opportunity for increased value for shareholders. Occidental’s management viewed the purchase as a successful and strategic business decision; however, some investors and analysts saw it as an expensive risk. It’s unfortunate that despite the promise of that acquisition, shares have dropped so dramatically this year, due in large part to external factors in the oil market. Key factors have included tensions between Saudi Arabia and Russia, as well as an unexpected decrease in demand related to COVID-19.

Institutions Are Selling

Institutions overall were selling the stock, with the number of aggregate 13F shares decreasing by approximately 1.6% as of December 31, 2019, to roughly 690.6 million from 701.6 million three months earlier. The outlook was drearier when looking at hedge fund activity, as these funds decreased their total 13F shares by about 11.5%, bringing shares down to approximately 148.0 million from 167.3 million.

Also, Occidental had a fourth quarter heat map rating of thirty-four. Occidental saw 32 hedge funds create new positions, and 54 add to existing ones, 45 close out their holdings, and 86 reduce their stake.

(WhaleWisdom)

Earnings Decrease Inevitable

Much like other companies in its industry, Occidental has been deeply affected by the recent global COVID-19 pandemic and hoping for U.S. government aid to get the industry through this period of unprecedented demand destruction and unsustainable pricing. 2020 estimates include a loss of non-GAAP earnings per share of approximately $3.63 and the potential for narrowing its decline in 2021. Meanwhile, analysts have cut their average price target to $17.09 per share.

Faithful Investors Stay Put

While many investors are selling or reducing interest in the stock, the faithful see the merit of risk-taking, as waiting out current economic factors could prove worthwhile. Occidental’s stock has been under a lot of pressure in recent years due to weaker oil prices, and its acquisition of Anadarko could pay off if oil prices and the economy stabilize.