What is Going On With These Four Stocks in the Spotlights?

Illumina, Inc. (NASDAQ:ILMN) inched up by 0.73% after reporting third quarter earnings of $0.80 per share on revenues of $550.3 million, beating earnings estimates by $0.01 per share, but missing revenue expectations by $5.77 million. Guidance is a bit disappointing, with management expecting revenue growth of 18% – 20% for the full year, down from the previous 20%, and also lowering adjusted EPS for 2015 to between $3.29  and $3.31 from the previous range of $3.39 – $3.45. Illumina has a great sequencing technology and is only beginning to scratch its potential, so this earnings report isn’t a big deal in the long run. The company needs the government to avoid setting price ceilings on new drugs, however, for the company’s future demand to remain strong.

VMware, Inc. (NYSE:VMW) is down by 12.7% after reporting third quarter earnings of $1.02 per share on revenues of $1.67 billion, beating estimates by $0.02 per share and $10 million, respectively. The stock is down because guidance is a bit soft, with management expecting fourth quarter revenue of $1.825-$1.875 billion versus the $1.88 billion consensus. Revenue growth for 2016 is also expected to be high single digit to low double digits versus the expectation of 10.9%. Billings growth, a leading indicator of revenues, is also lower than expected.

Hedge funds are divided on VMware, Inc. (NYSE:VMW). Although 35 of the funds we track hold just 2% of the float ($740.12 million) at the end of June, eight of VMware’s top 10 elite fund holders either established new positions or increased their positions in the second quarter. Matt Sirovich and Jeremy Mindich’s Scopia Capital increased its position by 4% to 1.79 million shares, while Glenn Russell Dubin‘s Highbridge Capital Management raised its stake by 5% to 624,564 shares. Christopher Medlock James’ Partner Fund Management and Dmitry Balyasny’s Balyasny Asset Management established new positions of 841,721 shares and 694,818 shares, respectively.

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