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PTC Inc (PTC) Down After Posting Lower Revenues In Preliminary Results

The shares of PTC Inc (NASDAQ:PTC) started the day with a decrease in investor sentiment, trading at $39.02, a 4.32% decline in the price of shares. The technology company announced preliminary results for its fiscal third quarter of 2015, with earnings exceeding market expectations. The enterprise solution company is expecting earnings per share of $0.51 to $0.52 for the quarter against market expectations of $0.49. However, PTC Inc issued a lower revenue guidance of $303 million, which is lower than the market’s estimate of $309.5 million. The company will disclose detailed fiscal third quarter results on July 29. If the EPS estimates come out to be true, PTC Inc will beat the market’s earnings estimates in two consecutive quarters. The technology solution company reported earnings per share of $0.53 in its previous quarter against market estimates of $0.47.

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While announcing the preliminary results, James Heppelmann, President and CEO of PTC Inc, said, “PTC preliminary third quarter non-GAAP earnings are above the high end of our guidance despite revenue coming in just below our guidance range…” The shares of PTC Inc (NASDAQ:PTC) have grown by 6.06% year-to-date and the company trades at a P/E ratio of 41.10. Smart money has been bearish on the stock of the technology company as of late, with 22 hedge fund managers holding aggregate investments of $396.20 million at the end of the first quarter, which was lower than their holdings worth $422.18 million, held by 27 hedge fund managers at the end of the last quarter of 2014.

At Insider Monkey, we track hedge funds’ moves in order to identify actionable patterns and profit from them. Our research has shown that hedge funds’ large-cap stock picks historically delivered a monthly alpha of six basis points, though these stocks underperformed the S&P 500 Total Return Index by an average of seven basis points per month between 1999 and 2012. On the other hand, the 15 most popular small-cap stocks among hedge funds outperformed the S&P 500 Index by an average of 95 basis points per month (read the details here). Since the official launch of our small-cap strategy in August 2012, it has performed just as predicted, returning over 135% and beating the market by more than 80 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise rather than large-cap stocks.

A similar sentiment was noticed among the insiders of the company, with at least 11 insider sales in the last six months, though it should be noted that insider sales can not be considered bearish activity per se. Heppelmann was among the leading insiders selling some of their stakes, as he sold 25,000 shares each on February 2 and May 4.

Negative hedge fund sentiment signals an expectation of lower growth, although the hedge fund managers have been proven wrong on several occasions. Let’s find out the hedge fund sentiment around PTC Inc.

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