How the Market is Reacting To Acacia, iRobot, Fitbit, and More Today

After opening in the green, the markets are slightly in the red as traders digest all of the recent earnings reports that have been released and try to gauge the state of the U.S and global economy through them.

In this article, we’ll examine five stocks that traders are closely watching and see how they’ve reacted to them today. Those stocks are Acacia Communications, Inc. (NASDAQ:ACIA), GrubHub Inc (NYSE:GRUB), Hershey Co (NYSE:HSY), Fitbit Inc (NYSE:FIT), and iRobot Corporation (NASDAQ:IRBT). We’ll also check in with the smart money to uncover hedge fund sentiment towards each of the stocks.

At Insider Monkey, we track over 750 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details).

Acacia Communications, Inc. (NASDAQ:ACIA) shares are 12% in the red after two of its customers (ZTE Corporation and AVDA Optical Networking), which together comprised over 60% of Acacia’s revenue for the first-half of 2016, reported soft results for their third quarters. ZTE, which accounted for almost 38% of Acacia’s first-half sales, specifically said that the telecom industry is “under pressure” due to weak global macro-economic conditions. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, six funds owned $73.61 million in Acacia Communications, Inc. (NASDAQ:ACIA) positions at the end of June, which accounted for 5.20% of the float.

GrubHub Inc (NYSE:GRUB) shares are 1.3% in the green after Darren Aftahi of Roth Capital upgraded the stock to ‘Buy’ from ‘Neutral’ and raised his price target on it to $45 per share from $44. Although Uber and other companies could potentially take some of its market share in the future, Aftahi thinks GrubHub has attractive growth prospects and a certain stickiness to its platform that should help it command a premium valuation versus its peers. GrubHub recently reported relatively in-line expectations for its third quarter (although traders were seemingly expecting better numbers than analysts). The number of funds within our database with holdings in GrubHub Inc (NYSE:GRUB) rose by two quarter-over-quarter to 25 at the end of June.

On the next page we’ll find out what analysts have had to say about Hershey, Fitbit, and iRobot Corporation recently.

Hershey Co (NYSE:HSY) shares are moderately higher after David Driscoll of Citigroup upgraded the stock to ‘Buy’ from ‘Neutral’. Although he also cut his price target on its shares to $110 from $115, Driscoll thinks the impending announcement of an expense savings program could increase margins by as much as 300 basis points and be a positive catalyst that improves sentiment towards the stock. 28 funds that we track had a long position in Hershey Co (NYSE:HSY) at the end of the second quarter, up by seven funds from the end of the first quarter.

In other analyst-related news, Fitbit Inc (NYSE:FIT) is in the spotlight after Nick McKay of Wedbush commented that he expects the fitness technology company to beat the Street’s consensus third quarter estimate due to robust consumer demand for Fitbit’s catalog products, and the company’s increased retail presence. McKay thinks the company’s Charge 2 numbers will come in strong, and he expects Fitbit to also increase its guidance. Wedbush has an ‘Outperform’ rating and $18 price target on the stock. Fitbit Inc (NYSE:FIT) was held by 29 of the hedge funds tracked by Insider Monkey as of the end of June.

iRobot Corporation (NASDAQ:IRBT) shares are in the green after Bobby Burleson of Canaccord hiked his price target on them to $53 from $45 and maintained his ‘Buy’ rating on them. Burleson believes demand for the roomba and other similar products will remain strong as consumer awareness over robotic vacuums increases. iRobot reported better-than-expected top and bottom-line earnings for its third quarter on Tuesday, which helped propel the stock close to a 52-week high. 15 funds tracked by Insider Monkey owned $72.67 million in iRobot Corporation (NASDAQ:IRBT) shares on June 30, compared to eight funds with $77.14 million in holdings on March 31.

Disclosure: None