Salesforce, EA, Red Hat: Rail-Splitter Likes These 5 Tech Stocks for Q3

#3. Electronic Arts Inc. (NASDAQ:EA)

 – Shares Owned by Rail-Splitter Capital Management (as of June 30): 206,543

 – Value of Holding (as of June 30): $15.65 Million

Electronic Arts Inc. (NASDAQ:EA) is the only stock covered in this article in which Rail-Splitter Capital Management reduced its stake during the second quarter, albeit by just 8%. The gaming software company came out with better than expected fiscal year 2016 fourth quarter numbers in May, causing its shares to spike. Largely due to the solid gains it registered at that time, the stock is currently trading up by 12.58% year-to-date and very close to its lifetime high of $79.99. Electronic Arts Inc. (NASDAQ:EA) announced a repeat to that fantastic quarterly performance on August 2, when it reported EPS of $0.07 on revenue of $682 million for its fiscal 2017 first quarter, besting analysts’ expectations of a loss of $0.02 per share on revenue of $652.64 million. Following the company’s recent earnings release, several analysts boosted their price target on the stock, including analysts at Barclays, who raised their target to $88 from $82 while keeping their rating on the stock unchanged at ‘Overweight’. Louis Navellier’s Navellier & Associates was another hedge fund that reduced its stake in the company during the second quarter, by 23% to 210,692 shares.

#2. TransUnion (NYSE:TRU)

 – Shares Owned by Rail-Splitter Capital Management (as of June 30): 474,872

 – Value of  Holding (as of June 30): $15.88 Million

Amid a 21% rise in TransUnion (NYSE:TRU)’s stock during the second quarter, Rail-Splitter Capital Management increased its stake in the company by 23%. The consumer credit reporting company had its IPO last year at $22.50 per share and since then its stock has appreciated by over 45%, with most of those gains coming in the last four months. However, the stock has witnessed a slight correction in the last few days despite the company reporting better than expected second quarter results on July 26. While the Street had expected TransUnion (NYSE:TRU) to report EPS of $0.32 on revenue of $414.70 million for the quarter, the company declared EPS of $0.37 on revenue of $426 million. Earlier this year, TransUnion acquired healthcare services company Auditz LLC for an undisclosed sum of money. The move has been appreciated by analysts who track the stock, as they feel that it will help TransUnion to broaden its healthcare footprint. Dmitry Balyasny‘s Balyasny Asset Management initiated a stake in TransUnion during the second quarter, purchasing 60,000 shares of the company.

#1. Red Hat Inc (NYSE:RHT)

 – Shares Owned by Rail-Splitter Capital Management (as of June 30): 220,364

 – Value of Holding (as of June 30): $16 Million

Red Hat Inc (NYSE:RHT) climbed three spots in Rail-Splitter Capital’s equity portfolio during the second quarter to become its third-largest holding and top tech pick at the end of June, after the fund increased its stake in the company by 19% during the quarter. The open source software solutions company lost one-fourth of its market capitalization at the beginning of 2016 amid the aforementioned broader struggles in the global markets. Though its stock managed a recovery over the next few months, it fell again in June after the company reported its fiscal year 2017 first quarter results. Shares currently trade down by 11% year-to-date. According to several analysts, Red Hat Inc (NYSE:RHT)’s decision to announce its acquisition of API Management company 3Scale on the same day as it reported its quarterly earnings was the main reason behind its stock taking a beating that day as opposed to the company’s quarterly results. The stock currently sports an average rating of ‘Overweight’ and an average price target of $87.69 from 30 the leading analysts and research firms on the Street who track it. Other hedge funds that increased their stake in Red Hat during the second quarter included Joshua Packwood and Schuster Tanger’s Radix Partners, which lifted its holding by 23% to 4,789 shares.

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