Shares of Tableau Software Inc (NYSE:DATA) have fallen off a cliff in trading today following the release of the company’s second quarter earnings results this morning, despite the company posting beats on both the top and bottom lines in its results. Tableau, which creates data visualization software, earned $0.07 in non-GAAP earnings per share, on revenue of $149.9 million, which was up by 65% year-over-year. Analysts were predicting earnings of $0.04 on revenue of $141.04 million. Nonetheless, shares of the company are down by more than 17% in trading today, seemingly on the slowing growth rate, which was down from the 75% year-over-year revenue growth the company posted for the first quarter. Despite seeming fears over its growth, the Seattle-based company has grown its international revenue to 25% of its total revenue and plans to open a new data center in Europe later this year. Tableau Software Inc (NYSE:DATA) added 3,000 customers year-over-year.
Hedge funds appear to have predicted the company’s strong performance, at least up until today. At the end of the first quarter, a total of 38 of the hedge funds tracked by Insider Monkey were bullish in this stock, an increase of three funds from one quarter earlier. Their aggregate holdings also increased in value, to $1.19 billion from $1.02 billion, though shares rose by about 10% during that period, which accounts for a little over half of the increase. Nonetheless, the smart money was slightly bullish on the company during the first quarter. Nor were they wrong to be, as shares soared by 25% during the second quarter and are still well ahead of where they were throughout the first quarter, despite the big losses today.
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 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 123% and beating the market by more than 66 percentage points. We believe the data is clear: investors will be better off by focusing on small-cap stocks utilizing hedge fund expertise (while avoiding their high fees at the same time) rather than large-cap stocks.
At Insider Monkey, we also track insider transactions (hence our name), in an effort to form an overall picture about a company’s current health and future prospects. There have been no purchases of shares made by insiders of the company, however there have been an excessive number of insider sales, 130 in total. This is nothing new however, as it has a high volume of insider sales dating back over a year, which may be due to executive compensation.
With all of this in mind, let’s take a peek at the key smart money action encompassing Tableau Software Inc (NYSE:DATA).