The U.S stock market is having a breather today, as investors digest the latest financial reports and also look for clues of a possible rate hike in December. Solid economic data, as well as remarks made by Fed Chair Janet Yellen during today’s testimony before the House Financial Services Committee are hinting at an increased probability of an interest rate hike at the Federal Reserve’s next policy meeting. Although stocks have turned south shortly after the opening bell, some have stayed in the green and have continued to surge. Michael Kors Holdings Ltd (NYSE:KORS), Paycom Software Inc (NYSE:PAYC), Energy Focus Inc (NASDAQ:EFOI) and Vonage Holdings Corp. (NYSE:VG) are among them. Let’s have a look at what has investors excited about these stocks today.
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Shareholders of Michael Kors Holdings Ltd (NYSE:KORS) are all smiles today, after the company’s fiscal 2016 second quarter financial report was better than expected. The company posted revenues of $1.13 billion and earnings per share of $1.01, beating Wall Street estimates of $1.07 billion in revenues and earnings of $0.89 per share. The good news did not stop there, as the maker of luxury purses and clothing has announced plans for a $500 million share buyback program and has committed to scale down its promotions program in order to preserve its brand equity. These announcements managed to overshadow the downward revision of its full 2016 fiscal year forecasts and the stock has surged by more than 10% in the first hours of trading.
Hedge fund sentiment towards Michael Kors Holdings Ltd (NYSE:KORS) did not change much during the second quarter, as the number of funds that we track holding a stake in the company fell to 39, from 40 at the end of March. Together they held 12.5% of the company’s common stock and their holdings were valued at more than $1.03 billion. Hedge fund prodigy David Einhorn is very bullish on the stock, having built over the second quarter a stake that amassed 3.62 million shares. Investment legend Joel Greenblatt is also optimistic about the prospects of the company, having increased his stake by 753% during the quarter to roughly 1.91 million shares.
Solid third quarter financial figures have pushed Paycom Software Inc (NYSE:PAYC) shares higher, with the stock opening 12.5% higher today and continuing to surge during morning trading. A provider of human-resources software, Paycom has registered revenues of $55.3 million, up by 51% year-over-year, and a profit of $0.08 per share when adjusted for stock option expense and other non-recurring costs. These figures were above analysts’ expectations of $51.2 million in revenues and earnings of $o.o7 per share. Paycom also said it expects revenues of $59.5 million-to-$61.5 million for the current quarter.
The number of elite hedge funds holding Paycom Software Inc (NYSE:PAYC) in their portfolios rose significantly during the second quarter, as 18 funds reported stakes in the company, up from ten at the end of the first quarter. Their combined holdings were valued at $68.8 million, but accounted for just 3.5% of the company’s outstanding stock. Richard Driehaus decided to step up his interest in Paycom during the second quarter, boosting his stake by 21% to 606,318 shares according to Driehaus Capital’s latest 13F filing.
Head to the next page to find out why investors are pushing Energy Focus and Vonage Holdings up today.
It’s a good day for Energy Focus Inc (NASDAQ:EFOI) shareholders as well, as the company managed to beat analyst estimates in its latest financial report. The manufacturer of lighting products posted net income of $0.40 per share, easily beating Wall Street’s expectations of $0.13 per share. This came on the back of record sales of $18.3 million, up by 151% year-over-year, and were above expectations of $16.2 million. Energy Focus also managed to improve its margins, which stood at 49.8%, by 15.6 percentage points year-over-year. Shares jumped by as much as 29% in the opening hour today.
According to our database, only Brandon Osten’s Venator Capital Management held a stake in Energy Focus Inc (NASDAQ:EFOI) at the end of the second quarter, having reported ownership of 68,502 shares. The stock is currently trading at a trailing Price to Earnings (P/E) ratio of 83.xx, significantly higher than the industry average of 35.10. Analysts at Roth Capital and H.C. Wainwright recommend it as a ‘Buy’ and have set an average price target of $24.50 per share on it.
Although Vonage Holdings Corp. (NYSE:VG) only managed to meet analysts’ expectations, investors have still reacted positively and have pushed the stock up by as much as 18% so far today. The company registered revenues of $223 million, up by 4.2% year-over-year, and a profit of $0.06 per share, when adjusted for amortization costs and pretax expenses. The provider of communications solutions has also said that it expects full-year revenues to range between $891 million-and-$895 million.
At the end of June, 16 of the funds we track were invested in Vonage Holdings Corp. (NYSE:VG) and held roughly 7.8% of the company’s common stock. Jim Simons is a big fan, as his fund, Renaissance Technologies, held 10.3 million shares of Vonage Holdings at the end of the quarter, the largest holding among the funds we follow. George McCabe, the manager of Portolan Capital Management, is also bullish, having increased his stake by 27% during the second quarter to amass 1.99 million shares.