What’s Driving Oclaro, Gilead, Eaton, Boot Barn Holdings & Viavi Higher on Wednesday?

Markets continued to tumble on Wednesday, with all major U.S. stock indexes trading down, even as commodities surged. However, a few stocks were moving in the same direction as commodities. Among today’s gainers, we can count Oclaro, Inc. (NASDAQ:OCLR), Gilead Sciences, Inc. (NASDAQ:GILD), Eaton Corporation, PLC Ordinary Shares (NYSE:ETN), Boot Barn Holdings Inc (NYSE:BOOT), and Viavi Solutions Inc (NASDAQ:VIAV). So, let’s take a look into the events driving the advances in these stocks, and into what the hedge funds in our database think about the companies.

While there are many metrics that investors can assess in the investment process, 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 beat the S&P 500 by around 95 basis points per month (see more details here).

Back to Wednesday gainers, we’ve got Oclaro, Inc. (NASDAQ:OCLR), which is up by some 10% after the company beat estimates for its second quarter financial results on Tuesday afternoon. The small cap tech company reported earnings of $0.03 per share, $0.04 better than expected, on revenue of $94.13 million, up 8.4% year-over-year, and $2.64 million above the consensus estimate.

It seems like a few hedge funds saw the good times coming. Among those we track, 15 disclosed long stakes in the company as of the end of the third quarter of 2015, up by about 15% quarter-over-quarter. Just a few days ago, Alex Sacerdote’s Whale Rock Capital Management declared a large increase in its exposure to Oclaro, Inc. (NASDAQ:OCLR), from 3.83 million shares (disclosed in it last 13F) to more than 6.46 million shares.

Next up is Gilead Sciences, Inc. (NASDAQ:GILD), up by roughly 3% on the back of its fourth quarter fiscal 2015 results, which were announced on Tuesday evening. The biopharmaceutical company posted earnings of $3.32 per share on revenue of $8.506 billion, well above the Street’s consensus of $2.99 per share and $8.11 billion. However, the management provided 2016 revenue guidance that fell a little short of expectations and includes net sales in the range of $30 billion to $31 billion.

Similar to Mr. Market, hedge funds seem quite bullish on Gilead Sciences, Inc. (NASDAQ:GILD). During the third quarter of 2015, the number of funds in our database long the stock rose by 6.6% to 90. D. E. Shaw disclosed ownership of more than 6.15 million shares in its last 13F filing.

On the next page we will take a look at the news behind the surges at Eaton Corporation, Boot Barn Holdings, and Viavi Solutions.

Yet another stock moving on its earnings report on Wednesday is Eaton Corporation, PLC Ordinary Shares (NYSE:ETN), which was up by more than 6.5% in the afternoon trading. Before the market opened, the power management company posted earnings of $1.17 per share, well above the Street’s $1.09 consensus. However, the revenue of $5.06 billion was down by 9% year-over-year and missed the estimates of $5.08 billion.

Also driving the spike in Eaton Corporation, PLC Ordinary Shares (NYSE:ETN)’s shares were news about new share repurchase plan and cost-cutting initiatives. Among the funds betting on this stock, we could highlight Andreas Halvorsen’s Viking Global, which started a position, comprising 4.07 million shares, over the third quarter of 2015.

Boot Barn Holdings Inc (NYSE:BOOT) is one of the biggest gainers on Wednesday, having advanced by 28%. The retailer delivered earnings of $0.45 per share for the last quarter, $0.05 higher than a year ago, and well above the Street’s consensus of $0.06 per share, and revenue of $193.84 million, versus an estimate of $139.8 million.

However, as of the end of September, the number of hedge funds in our database that had long stakes in Boot Barn Holdings Inc (NYSE:BOOT) reached only seven, down from 11 a quarter earlier.

Finally, there’s Viavi Solutions Inc (NASDAQ:VIAV), a small cap tech company that was trading up by 16.3% in the afternoon. After the market closed on Tuesday, the firm reported earnings of $0.11 per share, beating the Street’s consensus estimate of $0.07 per share, on revenue of $232.1 million, which was $11.82 million above the estimates.

Also Viavi Solutions Inc (NASDAQ:VIAV)’s stock growth might be fueled by the announcement of the appointment of a new CEO Oleg Khaykin, a former Senior Advisor with private equity firm Silver Lake Partners, who will replace Richard Belluzzo.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.