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Why Are These Five Tech Stocks on the Move Today?

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The markets ended the Wednesday trading session on a positive note with major indices registering gains above 1%, boosted by the Fed’s announcement involving unchanged interest rates and hints to a very possible hike in December. However, in extended trading, as many companies reported their earnings, their stocks took off in different directions. Among them, GoPro Inc (NASDAQ:GPRO)‘s stock slumped by over 17% on the back of weaker than expected results. Another tech stock that lost ground in extended trading is Paypal Holdings Inc (NASDAQ:PYPL). On the other hand, Yelp Inc (NYSE:YELP)SunPower Corporation (NASDAQ:SPWR), and Cirrus Logic, Inc. (NASDAQ:CRUS) are trading higher on the back of solid results. Let’s take a closer look at the results disclosed by the five stocks and see if the hedge fund sentiment matches the overall market sentiment towards them.

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We at Insider Monkey assess the hedge fund sentiment by analyzing quarterly 13F filings of over 700 investors. Contrary to the general opinion, hedge funds are still very useful in identifying profitable opportunities among thousands of stocks. By imitating some of the hedge funds’ picks that they are collectively bullish on, we managed to beat the market substantially over the last couple of years. The key is to focus on their most popular small-cap picks, the 15 of which have returned 102% since August 2012, outperforming the S&P 500 ETF (SPY) by some 53 percentage points (see more details here).

Let’s take a look at the five tech stocks that caught our attention after the bell on Wednesday and their financial results. GoPro Inc (NASDAQ:GPRO) delivered a 43% revenue growth and 108% increase in adjusted EPS in year-on-year terms, but still missed the analysts’ projections amid weaker demand for its wearable cameras. The company’s revenue of $400.34 million missed the estimates of $434 million, while non-GAAP EPS of $0.25 came in $0.04 lower than expected. GoPro’s stock is already down by 52% year-to-date as consumers are getting more excited over the developing capabilities of smartphones in the video-shooting segment. However, the company delivered a 175% annual sales growth in Europe, the Middle East and Africa and Asia-Pacific combined and China has been its fastest growing market in its history, based on the first nine months of revenue. Amid the stock’s decline, smart money investors have also been fleeing GoPro Inc (NASDAQ:GPRO) and at the end of June, 21 funds among those we follow reported long stakes in the company, equal to around 10% of its outstanding stock and down by four compared to the previous quarter.

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Paypal Holdings Inc (NASDAQ:PYPL)‘s shares were also sent down in after-market after the company had reported revenue of $2.26 billion, up by 14% on the year and net income of $0.25 per share, compared to $0.19 delivered a year earlier. The company has separated from eBay Inc (NASDAQ:EBAY) earlier this year and it was its first financial report as an independent company. However, the revenue missed the Street’s estimates of $2.27 billion, but adjusted earnings of $0.31 per share came in higher than the $0.29 expected. Paypal Holdings Inc (NASDAQ:PYPL) also said that it gained market share during the third quarter and had a 27% annual growth in total payment volume on an FX neutral basis to $70 billion. The number of transactions went up by 38% on the year to 345 million. For the full year, PayPal said it expects a 15% – 18% growth in net revenue on an FX neutral, non-GAAP basis and non-GAAP earnings per share between $1.23 and $1.27. Mario Gabelli’s GAMCO Investors reported holding 491,221 shares of Paypal Holdings Inc (NASDAQ:PYPL) as of the end of September.

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On the next page we are going to take a look at three companies whose stocks appreciated in after-market on the back of the earnings release.

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