With the three major indexes slightly in the red for today after Monday’s brutal sell-off, GoPro Inc (NASDAQ:GPRO), Micron Technology, Inc. (NASDAQ:MU), Auris Medical Holding AG (NASDAQ:EARS), Progressive Waste Solutions Ltd (USA) (NYSE:BIN), and Avid Technology, Inc. (NASDAQ:AVID) are moving driven by different catalysts that we are going to discuss in this article.
In addition, let’s analyze hedge fund sentiment toward the stocks, if relevant. But why do we track hedge fund activity? From one point of view we can argue that hedge funds are consistently underperforming when it comes to net returns over the last three years, when compared to the S&P 500. But that doesn’t mean that we should completely neglect their activity. There are various reasons behind the low hedge fund returns. Our research indicated that hedge funds’ long positions actually beat the market. In our back-tests covering the 1999-2012 period hedge funds’ top small-cap stocks edged the S&P 500 index by double digits annually. The 15 most popular small-cap stock picks among hedge funds also have bested passive index funds by around 53 percentage points since September 2012 (see the details here).
Swimming against the tide of downgrades, the analysts at JPMorgan defended GoPro Inc (NASDAQ:GPRO) today, mentioning that channel checks show GoPro’s Hero 4 models selling briskly during the holiday season. The analysts noted that “interest in the GoPro product family remains robust, judging by Google Trends search metrics during 2015 X-mas pointing to levels last seen during the initial product launch in Oct 2014”, and believe the channel checks and strong interest could lead GoPro Inc (NASDAQ:GPRO) to beat expectations for its fourth quarter. JPMorgan has a $45 price target on the stock. The hedge fund sentiment towards GoPro has become more optimistic, with the number of funds from our database long the stock rising by four to 25 during the third quarter. Shares of the action camera maker rallied above $20 earlier in the morning before retracting.
Micron Technology, Inc. (NASDAQ:MU) shares are 4.6% higher as the end of the year tax-loss selling no longer weighs on the stock. Although Micron Technology, Inc. (NASDAQ:MU)’s guidance is disappointing with management expecting a second-quarter loss between $0.05 to $0.12 per share, many hedge funds still believe in the company. David Einhorn’s Greenlight Capital was among the 71 elite funds that were long the stock at the end of the third quarter.
On the next page, we examine Auris Medical Holding, Progressive Waste Solutions, and Avid Technology.