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Hedge Funds Dump Apple, Buy Facebook In Q1

Hedge funds fled equities in the first quarter, with Apple ( AAPL ) and PepsiCo ( PEP ) the most-sold stocks, S&P Global Market Intelligence said in a report Wednesday . The top 10 hedge funds managed about $141 billion in equity holdings in Q1, down more than $18 billion from Q4 2015. The funds decreased the total number of stock positions held from 427 to 408, the fewest stock positions held since S&P Global Market Intelligence began tracking such data in 2014. It was the second consecutive quarter of equity sell-off by the large funds. Consumer discretionary and information technology stocks led the sell-off, with Apple ranked seeing the most selling for an individual stock last quarter. The major hedge funds sold $5.4 billion worth of Apple stock in Q1. Other top sells included PepsiCo ($1.8 billion), Amazon.com ( AMZN ) ($1.4 billion), Priceline ( PCLN ) ($1 billion) and Walgreen Boots Alliance ( WBA ) ($1 billion). The highest volume of buying among the top hedge funds occurred in Facebook ( FB ) stock, with a total of $2.3 billion in buys in the first quarter, S&P said. Other top buys included Broadcom ( AVGO ) ($1.5 billion), Alphabet ( GOOGL ) ($945 million), Eli Lilly ( LLY ) ($892 million) and Willis Towers Watson ( WLTW ) ($884 million). RELATED: As Growth Investors Flee Apple, Warren Buffett Sees Value Startup Bubble Bursting, Valuations Due For Reset, Analyst Says .

Cisco Jumps On Earnings, Outlook; Analysts Hail ‘Strong Execution’

Cisco Systems ( CSCO ) received several price-target hikes after its fiscal Q3 earnings late Wednesday beat on both the top and bottom lines, as did its earnings and revenue guidance. For its fiscal third quarter , Cisco said revenue rose 3% from the year-earlier period, to $12 billion, just beating the consensus estimate of $11.97 billion, as polled by Thomson Reuters. Cisco said earnings per share minus items rose 5.6% to 57 cents, edging the consensus of 55 cents. Cisco stock rose 4% in morning trade on the stock market today , near 28. FBN Securities analyst Shebly Seyrafi maintained an outperform rating on Cisco and raised his price target to 32 form 30. “We believe that management tone was more upbeat this time than three months ago,” he wrote in a research note. Drexel Hamilton analyst Brian White raised his price target to 36 from 34 and maintained his buy rating on Cisco stock. “Cisco’s strong execution in fiscal Q3 overpowered a challenging demand environment with upside in the quarter and a stronger than expected Q4 outlook,” White wrote in a research note. “Overall, we are very pleased with Cisco’s Q4 outlook, given the economic backdrop and soft IT spending environment.” RBC Capital Markets analyst Mitch Steves, who maintained an outperform rating, raised his price target to 33 from 31. “While we remain cautious on the legacy portfolio given the overall IT spending environment, we think Cisco is continuing to move in the right direction highlighted by solid margin performance and improving business mix,” he wrote. Pacific Crest Securities analyst Brent Bracelin maintained an overweight rating and a price target of 30. “We continue to be impressed by strong execution under the new leadership team,” Bracelin wrote. “Cisco continues to execute a multiyear shift to a software-centric, subscription-driven business model.” Analysts had lowered expectations ahead of Cisco earnings due to the growing number of companies outsourcing computing workloads to cloud computing service providers such as Amazon.com ( AMZN ) and its Amazon Web Services business. The move to cloud computing has lowered demand for Cisco’s networking gear. The lowered expectations also reflected trends toward lower spending on information technology overall. Well aware of the trends, Cisco is diversifying beyond its core switch and router business into newer, higher-growth segments such as software, data centers, security, wireless and the Internet of Things market.

Salesforce.com Nabs Bigger Deals, As Billings Growth A Bright Spot

Salesforce.com ‘s ( CRM ) growth in billing, a key sales metric, was a bright spot in Q1 earnings, analysts say. Salesforce.com late Wednesday reported Q1 earnings and revenue that topped expectations, while also raising its full-year revenue guidance. The business software provider’s stock was up 4.5% to 81.35 in early trading in the stock market today , blowing past a 77.92 point point and nearly hitting a record high. IBD’s Take: How healthy is Salesforce.com stock and how does it stack up vs. rivals? Find out at IBD Stock Checkup Billings rose at nearly twice the rate of the consensus estimate of 16% growth in Q1. “Billings grew to $1.63 billion, or 31% year over year, which was better than consensus of $1.45 billion and accelerated from 28% growth in Q4,” Brendan Barnicle, a Pacific Crest analyst, said in a research report. San Francisco-based Salesforce.com garners mainly subscription revenue from on-demand software delivered via the Internet and over the cloud. The company continues to move up-market, making bigger deals with bigger companies, says Jefferies analyst John DiFucci. “We believe something has changed on the margin for Salesforce — that is, the willingness of large enterprises to engage on a more strategic level with SaaS (software-as-a-service) solutions,” DiFucci wrote in a research note. Salesforce.com, the leading provider of customer relationship software, said Q1 profit jumped 50% to 24 cents per share minus items. Revenue in the three months ended April 30 rose 27% to $1.92 billion, the company said. Analysts polled by Thomson Reuters had modeled 23 cents and $1.89 billion. In the current quarter, Salesforce.com forecast earnings ex items of 24 cents to 25 cents per share, up from 19 cents in the year-earlier quarter, and revenue of $2.005 billion to $2.015 billion, up 23%. Analysts had estimated 25 cents and $1.98 billion, respectively. Salesforce.com increased its full-year revenue guidance to $8.2 billion from $8.16 billion. “Following a very strong fourth quarter, where the company signed a nine-figure transaction and saw its volume of seven-figure deals increase more than 60%, the company continued its momentum of large deal activity in the quarter — closing another nine-figure transaction and again increasing the volume and size of its large transactions as compared with the year-ago period,” Bhavan Suri, a William Blair analyst, said in a report. “Not only did this lead to another strong billings beat, but it also further supplements Salesforce’s position as the cloud platform of choice.”