Why GoPro, Ulta, Lindsay, and More Are Commanding the Spotlight

It’s a rare role reversal today, as crude futures are relatively unchanged while the S&P 500, Dow and Nasdaq are 0.7%-to-0.9% in the red as of one hour after the market opened.

In this article, we’ll analyze why several companies in the S&P 500 (and some others) are in the spotlight today, including Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA), GoPro Inc (NASDAQ:GPRO), Aaron’s, Inc. (NYSE:AAN), Winnebago Industries, Inc. (NYSE:WGO), and Lindsay Corporation (NYSE:LNN), and check in with the smart money to see what successful hedge funds think of the five stocks.

Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).

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Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) shares have surged by over 7.6% after the company issued solid guidance during its analyst and investor day. For its 2016 fiscal year, Ulta Salon expects its comparable sales to rise by between 12% and 14%, up from the previous outlook of an increase of between 11% and 13%. Ulta Salo also expects earnings per share growth to clock in around the mid-20’s range percentage-wise, versus the previous estimate of low-to-mid-20% EPS growth. In the long run, the company hopes to double its market share and to grow its EPS in the low-20% range during its 2017 to 2019 fiscal years. Stephen Mandel‘s Lone Pine Capital owned 3.3 million shares of Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) at the end of June.

GoPro Inc (NASDAQ:GPRO) shares are 2.55% in the red after Erinn Murphy of Piper Jaffray reported that GoPro has paused shipments to Amazon.com, Inc. (NASDAQ:AMZN) temporarily. Although GoPro plans to resume shipments by the end of the month, Murphy doesn’t think GoPro’s management factored in the Amazon shipment halt in their latest guidance. Murphy has an ‘Underweight’ rating and a $9 price target on GoPro’s stock. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 16 funds were long GoPro Inc (NASDAQ:GPRO) on June 30, owning $124.94 million worth of its shares in aggregate.

On the next page we’ll find out why Aaron’s, Winnebago Industries, and Lindsay Corporation are trending.