A Closer Look at Five Tech Stocks in Spotlight on Tuesday

Stocks are slipping on Tuesday, driven by lower-than-expected core PCE Index and consumer income growth of 0.1% and 0.3%, respectively, and in spite of a rebound in oil prices.

Among the tech stocks making headlines today are Twitter Inc (NYSE:TWTR), Microsoft Corporation (NASDAQ:MSFT), LinkedIn Corp (NYSE:LNKD), salesforce.com, inc. (NYSE:CRM) and Teradata Corporation (NYSE:TDC). So, let’s take a look at the news surrounding these big tech companies, and analyze what the funds in our database think about them.

At Insider Monkey, we track around 765 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details).

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Twitter Tumbles On Exec Departure

Let’s start with Twitter Inc (NYSE:TWTR), which has lost nearly 2% on Tuesday, amid news that the company’s VP of communications, Natalie Kerris, is leaving after only six months of work. CMO Leslie Berland will replace Kerris, while still running the marketing division. Still, this is a significant blow for the company, which continues to struggle with user growth and communicating its story. Twitter Inc (NYSE:TWTR) also announced this morning its plan for the Rio 2016 Olympics. “Moments, over 200 emojis and on the ground activations in Brazil will bring fans closer to the Games on Twitter, Vine and Periscope,” a press release read. However, this could not help the stock recuperate from the bad news about Kerris’ departure. A total of 27 hedge funds in our database were long Twitter at the end of the first quarter, down from 30 in the previous quarter.

Microsoft Up Slightly After Billionaire Debt Sale

Second in line is Microsoft Corporation (NASDAQ:MSFT), which has inched down by 0.12% today, after the company sold $19.75 billion of debt on Monday, marking the fifth largest corporate bond sale ever recorded. The proceeds will be used to fund the acquisition of LinkedIn Corp (NYSE:LNKD). “The sale from the triple-A rated company, one of only two US corporates to hold the opinion from Standard & Poor’s, was met with intense demand as portfolio managers search out income. Trillions of dollars of sovereign and corporate debt are currently trading with a yield below zero,” a Financial Times article explicated. As of the end of the first quarter, Microsoft Corporation (NASDAQ:MSFT) was one of the most popular stocks among the funds that we track. At the end of March, 144 funds in our database held long positions in Microsoft, including Jeffrey Ubben’s ValueAct Capital, which last disclosed ownership of 56.62 million shares. At the same time, 41 investors amassed $1.38 billion worth of LinkedIn Corp (NYSE:LNKD) stock.

Salesforce Declines After Quip Acquisition

Also down on Tuesday is salesforce.com, inc. (NYSE:CRM), which has tumbled by more than 1.2% after announcing the acquisition of Quip. The company will reportedly pay about $582 million in stock for the startup responsible for “Living Documents,” a product that competes with Microsoft Word and Alphabet Inc (NASDAQ:GOOGL)’s Google Docs. salesforce.com, inc. (NYSE:CRM) counted 63 investors among those we track at the end of the first quarter. Their stakes were worth approximately $1.7 billion in aggregate. One of the largest positions was held by Christopher Lord’s Criterion Capital, which last declared holding more than 2 million shares of the company.

Teradata Spikes On Strong Results, Guidance

Finally, there’s Teradata Corporation (NYSE:TDC), whose stock is up by almost 4% on the back of the company reporting its second-quarter financial results. EPS of $0.71 and revenue of $599 million beat the Street’s consensus estimates by $0.11 and $39.77 million, respectively. For the full year, management anticipates EPS of $2.35 to $2.50, versus a consensus estimate of $2.41, and revenue between $2.32 billion and $2.39 billion, beating the $2.29 billion analysts’ estimate. At the end of the first quarter, 23 funds from our database were long Teradata Corporation (NYSE:TDC), owning more than 22% of the company’s stock.

Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.