This Week in Tech: Apple, Amazon, GoPro and More

Although the main headline this week was whether or not Twitter Inc (NYSE:TWTR) would successfully find a buyer, several other tech companies were making some noteworthy headlines of their own. They included Apple Inc. (NASDAQ:AAPL), LendingClub Corp (NYSE:LC), Mercadolibre Inc (NASDAQ:MELI), GoPro Inc (NASDAQ:GPRO), and Amazon.com, Inc. (NASDAQ:AMZN).

In this article, we’ll recap the meaningful events that occurred to each of the five companies during the past trading week, and analyze how successful hedge funds have been trading each of them.

While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).

Apple Inc. (NASDAQ:AAPL) turned in a solid week, rising by 3.1% even as the Nasdaq retreated by 1.5%. Although the tech company’s reasonable valuation may have had something to do with the rise, Apple’s stock more likely rallied due to competitor Samsung’s troubles. Due to fire problems, Apple’s arch hardware competitor permanently ended sales of its popular Galaxy Note 7, and many analysts believe that the Note’s troubles will lead to less sales for Samsung’s next flagship phone, the Galaxy S8. Less sales for Samsung assuredly means more sales for Apple, and more cash flow for Apple shareholders. Some analysts are already putting the number of added iPhone sales at around 8 million units before 2016 is over, though that figure could be overly optimistic, as it assumes that well over 50% of people who were projected to buy a Note 7 in the second half of this year will now buy an iPhone instead. Ken Fisher‘s Fisher Asset Management inched up its stake in Apple Inc. (NASDAQ:AAPL) by 1% to 11.3 million shares as of the end of September.

LendingClub Corp (NYSE:LC) retreated by almost 10% from Monday through Friday, first due to an analyst downgrade from Wedbush in which analyst Henry Coffey set a $3.75 price target on the stock and wrote that investors might have to wait three-to-five years before Lending Club could turn in a meaningful profit. Then on Thursday, Goldman Sachs introduced its own online-lending platform, Marcus, which will surely take some market share away from Lending Club in the higher credit-score tiers. On Friday, Lending Club also announced that it has tightened its credit standards and inched up its interest rates on certain loans, something that might make originations a little bit more difficult. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 24 were long $149.54 million worth of LendingClub Corp (NYSE:LC) shares on June 30, which accounted for 9.10% of the float.

On the next page we’ll examine the week that was for Mercadolibre, GoPro, and Amazon.

Like Lending Club, Mercadolibre Inc (NASDAQ:MELI) shares also had a bad week, falling by 12% mainly due to eBay Inc (NASDAQ:EBAY)’s decision to sell the majority of its 20% stake in the Latin American e-commerce company. Given the huge size of the stake to be divested (up to 5.5 million shares + the underwriters option), many traders think the selling has created an overhang for the stock in the short-term. 21 funds that we track were long Mercadolibre Inc (NASDAQ:MELI) at the end of the second quarter, unchanged from the end of the first quarter.

GoPro Inc (NASDAQ:GPRO) fell by 16% this week as a lack of positive catalysts coupled with negative sentiment weighed on the stock. Also hurting the sports camera maker’s shares was the news that the company has temporarily paused domestic shipments of the HERO5 to Amazon until either the end of October or early-November. Bearish analyst Erinn Murphy of Piper Jaffray doesn’t think GoPro’s management has factored the disruption into its previous guidance, which suggests that its earnings results for the affected period could miss the mark. Some analysts don’t think the pause is a big deal, however, as Paul Coster of JPMorgan estimates that it will cost GoPro around 30,000 Hero 5 sales, or under $10 million in revenue. 16 funds in our database had a long position in GoPro Inc (NASDAQ:GPRO) at the end of June.

In contrast to previous weeks, Amazon.com, Inc. (NASDAQ:AMZN) shares ended the week 2% in the red. Although the sell-side is still a big fan (Youssef Squali of Cantor Fitzgerald raised his price target on Amazon’s stock to $1,000 from $835 on Wednesday), Amazon shares seem to be taking some time to consolidate a little bit before making their next move. According to Nasdaq.com, Amazon is expected to release its latest earnings results on October 27 after the market close. The number of funds tracked by Insider Monkey with holdings in Amazon.com, Inc. (NASDAQ:AMZN) rose by 12 during the second quarter to 145 at the end of June.

Disclosure: None