Ixia (NASDAQ:XXIA) ‘s stock has gained more than 18% since the beginning of the year and hit a fresh 52-week high today, as the stock has gained another 5% following positive coverage initiated by DA Davidson. The brokerage initiated coverage on the stock with a ‘Buy’ rating and a price target of $17 on Ixia (NASDAQ:XXIA), representing considerable upside of about 36% from yesterday’s closing price. Ixia posted a beat in its first quarter earnings report, released last month reporting EPS of $0.12, 20% higher than estimates of $0.10. It also posted revenue of $120.96 million, beating the expectations by $3.51 million.
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We track hedge fund and insider sentiment in order to understand the true potential of stocks going forward. We believe that hedge fund sentiment reveals the true nature of a stock, being powered by vast and well funded research and analytical teams. In the case of Ixia, hedge fund sentiment was strongly positive during the first quarter, as the number of hedge funds with holdings in the stock went up to 14, an increase from 10 at the end of 2014, representing an increase of 40%.
On the other hand, insider sentiment was negative, as there were no insider purchases in the first quarter, but many insiders sold some of their positions. Negative insider sentiment however should not be considered as strong a signal as insider buying, as there are multiple reasons why an insider could sell some of their position that have nothing to do with the expected performance of the stock. As mentioned, the stock has done quite well year-to-date and hedge fund sentiment is positive.
With all of this in mind, let’s go over the latest action surrounding Ixia (NASDAQ:XXIA).