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Do you like to follow earnings season? Although this earnings season is well underway, there are still many names that haven't yet reported their results. Here we focused on the 62 companies that are expected to report earnings in February.

From this list of companies, we focused on companies that have a dividend yield of at least 1% but not more than 8%. This allowed us to focus on the better quality credits. We found 24 companies that met the criteria.

We then looked through the earnings history for these 24 companies. We went back five quarters and selected the names with an average negative earnings surprise of at least -5%.

Finally, we researched their 13F's looking for those with bullish sentiment from institutional investors, with significant net institutional purchases over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these names to outperform into the future.

For an interactive version of this chart, click on the image below. Analyst ratings sourced from Zacks Investment Research.

Do you think history won't repeat itself? Do you think these stocks will outperform like hedge funds expect? Use this list as a starting point for your own analysis.

1. Cliffs Natural Resources Inc. (CLF): Produces iron ore pellets, lump and fines iron ore, and metallurgical coal products.

  • Market cap at $5.32B, most recent closing price at $37.31. Dividend yield at 6.7%.
  • The company is expected to report earnings on February 13th, 2013.
  • In Dec 2011: Reported EPS at 1.42 vs. estimate at 1.52 (surprise of -6.6%). In Mar 2012: Reported EPS at 0.85 vs. estimate at 1.1 (surprise of -22.7%). In Jun 2012: Reported EPS at 1.63 vs. estimate at 1.77 (surprise of -7.9%). In Sep 2012: Reported 0.61 vs. estimate at 1.05 (surprise of -41.9%. [Average earnings surprise at -19.78%].
  • Net institutional purchases in the current quarter at 12.0M shares, which represents about 8.49% of the company's float of 141.27M shares. The 2 top holders of the stock are Capital World Investors, and the Vanguard Group.

2. KAR Auction Services, Inc. (KAR): Provides vehicle auction services in North America.

  • Market cap at $2.91B, most recent closing price at $21.33. Dividend yield at 3.56%.
  • The company is expected to report earnings on February 25th, 2013.
  • In Dec 2011: Reported EPS at 0.21 vs. estimate at 0.22 (surprise of -4.5%). In Mar 2012: Reported EPS at 0.31 vs. estimate at 0.32 (surprise of -3.1%). In Jun 2012: Reported EPS at 0.26 vs. estimate at 0.28 (surprise of -7.1%). In Sep 2012: Reported 0.23 vs. estimate at 0.26 (surprise of -11.5%. [Average earnings surprise at -6.55%].
  • Net institutional purchases in the current quarter at 3.7M shares, which represents about 5.1% of the company's float of 72.57M shares. The 2 top holders of the stock are Goldman Sachs, and Shapiro Capital Management.

3. Sealed Air Corporation (SEE): Through its subsidiaries, manufactures and sells packaging and performance-based materials and equipment systems worldwide.

  • Market cap at $3.64B, most recent closing price at $18.72. Dividend yield at 2.78%.
  • The company is expected to report earnings on February 19th, 2013.
  • In Dec 2011: Reported EPS at 0.08 vs. estimate at 0.49 (surprise of -83.7%). In Mar 2012: Reported EPS at 0.17 vs. estimate at 0.21 (surprise of -19%). In Jun 2012: Reported EPS at 0.16 vs. estimate at 0.35 (surprise of -54.3%). In Sep 2012: Reported 0.28 vs. estimate at 0.31 (surprise of -9.7%. [Average earnings surprise at -41.68%].
  • Net institutional purchases in the current quarter at 9.7M shares, which represents about 5.1% of the company's float of 190.21M shares. The 2 top holders of the stock are The Vanguard Group, and State Street Capital.

4. Suburban Propane Partners LP (SPH): Engages in the retail marketing and distribution of propane, fuel oil, and refined fuels, and the marketing of natural gas and electricity in the United States.

  • Market cap at $2.4B, most recent closing price at $42.15. Dividend yield at 8%.
  • The company is expected to report earnings on February 7th, 2013.
  • In Dec 2011: Reported EPS at 0.65 vs. estimate at 1 (surprise of -35%). In Mar 2012: Reported EPS at 1.38 vs. estimate at 2.19 (surprise of -37%). In Jun 2012: Reported EPS at -0.26 vs. estimate at -0.2 (surprise of -30%). In Sep 2012: Reported -1.19 vs. estimate at -0.75 (surprise of -58.7%. [Average earnings surprise at -40.18%].
  • Net institutional purchases in the current quarter at 8.0M shares, which represents about 14.18% of the company's float of 56.42M shares. The 2 top holders of the stock are Neuberger Berman, and JP Morgan Chase.

*EPS data sourced from Yahoo! Finance, all other data sourced from Finviz.

Source: Hedge Funds Are Buying 4 Dividend Stocks With A History Of Negative Earnings Surprises