It’s been a busy Tuesday as usual and a lot of stocks such as Electronic Arts Inc. (NASDAQ:EA), Kinross Gold Corporation (NYSE:KGC), Inogen Inc (NASDAQ:INGN), Supernus Pharmaceuticals Inc (NASDAQ:SUPN), and 3D Systems Corporation (NYSE:DDD) are on the move in extended market trading after market close. Let’s analyze why each stock is on the move and how the smart money, hedge funds and big institutions are positioned among them.
Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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Electronic Arts Inc. (NASDAQ:EA) shares have surged 8% in after hours on the second day of the week after the company turned in a great fourth quarter. GAAP EPS was $0.69 on sales of $1.36 billion, beating by $0.10 per share and $160 million. Digital net books for the trailing twelve months was $3.722 billion, up 5% year over year. COO Blake Jorgensen said, “We ended our fiscal year with strong growth, driven by our live services business which continued to provide a very large, stable and profitable source of net bookings. Looking ahead, we will bring games to an extraordinary variety of players in fiscal 2020 and deliver on our commitment to players with deep live services content for Ultimate Team, Apex Legends, The Sims 4, Anthem and Battlefield V.” Of the around 700-740 elite funds we track, 57 funds owned $2.28 billion of Electronic Arts Inc. (NASDAQ:EA) on December 31, versus 79 funds and $4.5 billion respectively on September 30.
Kinross Gold Corporation (NYSE:KGC) rose in after hours after the company reported first quarter adjusted EPS of $0.07 on sales of $786.2 million. The bottom line beat by $0.05 per share while the top line missed by $14.5 million. The company is on track for its 2019 production and production cost of sales per ounce guidance.
Inogen Inc (NASDAQ:INGN) shares are lower by 26% after the company missed the GAAP EPS estimate by $0.05 per share. For the first quarter, GAAP EPS was $0.24 while sales was $90.2 million, up 14.1% year over year. Guidance is lower than expected, with management expecting 2019 sales of $405-$415 million, down from $430-$440 million. Net income is expected to be $36-$38 million, down from $40-$44 million. 25 top funds had a bullish position in Inogen Inc (NASDAQ:INGN) at the end of December. That’s out of around 740 top funds we track.
Supernus Pharmaceuticals Inc (NASDAQ:SUPN) shares are in the red by over 10% after hours after the company reported soft Q1 numbers. GAAP EPS was $0.34, missing by $0.13 while sales inched lower by 5.5% to $85.47 million, missing by $16.79 million. Although Trokendi XR prescriptions rose 11% year over year, some bulls were expecting stronger growth. Financial guidance was reaffirmed, however. Around 14% of Supernus’ float is short, indicating that some smart money funds may not be as bullish.
3D Systems Corporation (NYSE:DDD) shares are down 16% in the after hours on Tuesday after the company turned in a mixed quarter. Although adjusted loss per share was $0.09, or $0.04 per share better than estimates, sales inched lower by 8.4% year over year at $151.98 million and missed the consensus by $12.71 million. Gross margin came in at 43.2% versus the estimate of 46.2%. The company hopes to accelerate cost reductions and improve performance in the face of softer than expected demand. Around 21% of 3D systems corporation float is short, indicating that some smart money funds are cautious on the stock.
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