After posting strong first quarter fiscal 2016 financial results, the shares of CalAmp Corp. (NASDAQ:CAMP) jumped in excess of 8% during today’s trading session. The wireless solutions provider reported revenues of $65.4 million for the quarter with earnings per share of $0.26, which are in-line with the earnings estimates of analysts at Thompson Reuters. However, the annual revenue guidance of CalAmp Corp. (NASDAQ:CAMP) took precedence over the growth in revenue and earnings per share. The wireless services company is expecting annual revenues of $280 million to $290 million in 2016, which is better than the analysts’ expectations of $282.8 million at the middle of the range. While discussing the quarterly results, Michael Burdiek, President and Chief Executive Officer of CalAmp Corp, added, “Contributing to our strong results were record quarterly revenues posted by our Mobile Resource Management products business as well as broad based growth in our Wireless Networks business. Our Satellite segment revenue at $7.6 million was in line with expectations and added meaningfully to our bottom line profitability and operating cash flow.” Considering the boost in the share prices of CalAmp Corp. (NASDAQ:CAMP), the investors seem to agree with the strength of the company and are optimistic about the revenue and earnings growth guidance issued by the company.
The shares of CalAmp Corp have grown by over 8% year-to-date after trading mostly level for 2015. Hedge funds didn’t predict this upward movement and underestimated the stock, at least according to their March 31 positions (we’ll see in the coming weeks if they did indeed make a more bullish move on the stock in the second quarter). Ten hedge fund managers in our database held positions in the company with aggregate investments of $13.54 million at the end of the first quarter against investments of $29.06 million held by 12 hedge fund investors at the end of 2014. While shares did decline somewhat sharply in the first quarter, it doesn’t account for the drop
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We also track insider activity, looking in particular for purchases. Insiders were more or less inactive for the past six months in CalAmp however, with the only sale coming from Richard Vitelle, Executive Vice President and CFO at CalAmp Corp, of 3,000 shares sold on February 4, 2015.
These quarterly results are likely to attract more investments from hedge fund managers. For now, let’s analyze the current standings of hedge fund investors in the company.
Hedge fund activity in CalAmp Corp. (NASDAQ:CAMP)
At the end of the first quarter, a total of ten of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 17% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their stakes substantially.
According to hedge fund experts at Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the largest position in CalAmp Corp. (NASDAQ:CAMP). Royce & Associates has a $4.6 million position in the stock with an ownership of 282,200 shares, comprising less than 0.1% of its 13F portfolio. Coming in second is Phil Frohlich of Prescott Group Capital Management, with a $3.3 million position including 203,145 shares; 0.7% of its 13F portfolio is allocated to the company. Some other peers that are bullish include Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management, and Brian C. Freckmann’s Lyon Street Capital.
Seeing as CalAmp Corp. (NASDAQ:CAMP) has faced a declination in interest from the aggregate hedge fund industry, it’s safe to say that there were a few hedgies that slashed their entire stakes in the first quarter. Interestingly, Paul Marshall and Ian Wace’s Marshall Wace LLP said goodbye to the biggest stake of the 700 funds tracked by Insider Monkey, worth close to $4 million in stock, while Peter Rathjens, Bruce Clarke, and John Campbell of Arrowstreet Capital were right behind this move, as the fund managers dumped about $2.2 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by two funds in the first quarter.
After considering the solid quarterly performance of CalAmp Corp. (NASDAQ:CAMP) and growth in shares, we have to say that the hedge funds appear to have made a mistake. We recommend a buy for the shares of CalAmp Co.