25 Nov

Patterson Reports Fiscal 2Q16 Earnings, Drags Down Mid-Caps

WRITTEN BY Peter Neil

XLV mid-caps underperform

The mid-cap stocks of the Health Care Select Sector SPDR ETF (XLV) fell 0.45% and underperformed XLV and the SPDR S&P 500 ETF (SPY), which had returns of 0.3% and 0.15%, respectively.

XLV has a very low exposure to mid-cap stocks. XLV has only seven mid-cap stocks in its portfolio, accounting for 1.8% of its portfolio. Among the seven mid-cap stocks, five stocks fell, and only two had positive returns. XLV’s mid-cap stocks include DENTSPLY International (XRAY), Varian Medical Systems (VAR), and Tenet Healthcare (THC), which had returns of -0.95%, 0.1%, and 4.7%, respectively.

Patterson Reports Fiscal 2Q16 Earnings, Drags Down Mid-Caps

The above graph reflects the performance of XLV’s mid-cap stocks compared to XLV and SPY. For November 2015 to date, XLV’s mid-cap has outperformed XLV and SPY. XLV’s mid-cap has returned 2.2%, XLV has returned 0.3%, and SPY has returned 0.75%.

Patterson falls 6% on lower-than-expected results

Patterson Companies (PDCO) fell 6% on its lower-than-expected fiscal 2Q16 results. It reported net sales of $1.4 billion, a growth of 42% compared to the second quarter the previous year. Sales growth was mainly driven by the animal health segment, which saw a growth of 109%.

Patterson reported an adjusted EPS (earnings per share) of $0.56, a 27% increase over the prior year. Reported net income stood at $42.6 million compared to $41.9 million in the second quarter of the previous year. However, investors were disappointed with increasing operating expenses, which resulted in PDCO stock falling 6%. PDCO also bought back 3.9 million common shares under a share repurchase program.

PDCO closed at $45.71 and was trading below the 50-day and 100-day moving averages. PDCO has a weight of 0.15% in XLV’s portfolio.

Latest articles

US crude oil production has more than doubled since 2009 and grew by 1.1% over the last year. Currently, there are 133 operable refineries in the US.

The cannabis industry is fighting against the ongoing US-China trade war and recessionary worries, which have hurt valuations across the global market.

Higher revenues, increased ticket prices, and lower fuel costs are likely to drive American Airlines' Q3 earnings higher despite its Boeing MAX woes.

HEXO plans to report its Q4 earnings before the market opens on October 24. October has been tough for Hexo, with its stock falling 31.2% as of October 18.

Today, Advanced Micro Devices (AMD) rose 4% to over $32, making it one of the top Nasdaq gainers. Morgan Stanley raised its price target for AMD stock.

Early in 2019, President Donald Trump warned that China could overtake the US as a global power. He vowed that this would not happen under his leadership.