Why GoPro, Ulta, Lindsay, and More Are Commanding the Spotlight

It’s a rare role reversal today, as crude futures are relatively unchanged while the S&P 500, Dow and Nasdaq are 0.7%-to-0.9% in the red as of one hour after the market opened.

In this article, we’ll analyze why several companies in the S&P 500 (and some others) are in the spotlight today, including Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA), GoPro Inc (NASDAQ:GPRO), Aaron’s, Inc. (NYSE:AAN), Winnebago Industries, Inc. (NYSE:WGO), and Lindsay Corporation (NYSE:LNN), and check in with the smart money to see what successful hedge funds think of the five stocks.

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Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) shares have surged by over 7.6% after the company issued solid guidance during its analyst and investor day. For its 2016 fiscal year, Ulta Salon expects its comparable sales to rise by between 12% and 14%, up from the previous outlook of an increase of between 11% and 13%. Ulta Salo also expects earnings per share growth to clock in around the mid-20’s range percentage-wise, versus the previous estimate of low-to-mid-20% EPS growth. In the long run, the company hopes to double its market share and to grow its EPS in the low-20% range during its 2017 to 2019 fiscal years. Stephen Mandel‘s Lone Pine Capital owned 3.3 million shares of Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) at the end of June.

GoPro Inc (NASDAQ:GPRO) shares are 2.55% in the red after Erinn Murphy of Piper Jaffray reported that GoPro has paused shipments to Amazon.com, Inc. (NASDAQ:AMZN) temporarily. Although GoPro plans to resume shipments by the end of the month, Murphy doesn’t think GoPro’s management factored in the Amazon shipment halt in their latest guidance. Murphy has an ‘Underweight’ rating and a $9 price target on GoPro’s stock. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 16 funds were long GoPro Inc (NASDAQ:GPRO) on June 30, owning $124.94 million worth of its shares in aggregate.

On the next page we’ll find out why Aaron’s, Winnebago Industries, and Lindsay Corporation are trending.

Despite the soft broader market, Aaron’s, Inc. (NYSE:AAN) is 1% in the green today after Kyle Joseph of Jefferies initiated a ‘Buy’ rating and $30 price target on the stock. Joseph thinks Aaron’s is in a good spot to resume growth given the improvements and tailwinds in the company’s core business. Shares of the stock are up by 1.3% year-to-date and trade for 9.2-times forward earnings estimates. 25 funds that we track had a long position in Aaron’s, Inc. (NYSE:AAN) as of the 13F reporting period for the June quarter.

Winnebago Industries, Inc. (NYSE:WGO) earned $0.49 per share on sales of $263.25 million for the fourth quarter of its 2016 fiscal year, beating the Street’s estimates by $0.02 per share and $10.73 million, respectively. Overall sales rose by 4.9% year-over-year and gross margin inched up 90 basis points to 12.1%. Operating margin also rose by 70 basis points to 7.2%. CEO Michael Happe commented on the results in a press release, saying:

“Fourth-quarter revenues increased year over year, driven by continued strong growth in our towables business as well as modest improvement in motorized shipments. Importantly, income and gross margin also grew, due in part to our comprehensive strategic sourcing initiatives, a solid increase in labor efficiencies and lower warranty expense. Our towables business continues to be one of the primary performance drivers, as shipments and retail registrations both outperform the market, thanks to several new products and increased dealer outlets.”

The number of funds in our system which had holdings in Winnebago Industries, Inc. (NYSE:WGO) rose by two during the second quarter to 13 at the end of June.

The 13th isn’t proving to be an unlucky day for Lindsay Corporation (NYSE:LNN) shareholders, after the company reported better-than-expected fiscal 2016 fourth quarter results that have sent its shares up by nearly 11%. For the period, the company’s sales rose by 8% year-over-year to $132.9 million, while its gross margin expanded to 30.1% from 27.1%. Net earnings for the quarter came in at $0.73 per diluted share, compared to a net loss of $0.28 per diluted share in the comparable period of its 2015 fiscal year. Although Lindsay Corporation doesn’t expect the irrigation market to improve much in its fiscal 2017, they are optimistic about its growth over the long-term given the global population growth, expanding food production, and need for efficient water use. Eight funds in our database were long Lindsay Corporation (NYSE:LNN) at the end of June, up by two funds quarter-over-quarter.

Disclosure: None