Aerohive Networks Inc (NYSE:HIVE) has witnessed some major activity lately, from big purchases by hedge funds to analyst updates, and insider transactions to legal tussles. For many investors, these moves and their technical undertones are core to making investment decisions. With many things going on, both existing and potential investors are asking whether Aerohive Networks Inc (NYSE:HIVE) is a good stock to buy now or not. Let us look at Aerohive Networks Inc (NYSE:HIVE) into more detail;
Hedge Fund Purchases
There has been an increased excitement around the California-based network company by hedge funds recently. Several existing shareholders have upped their stakes and there are many others that have bought new portions in the stock. According to a Schedule 13D form involving Aerohive and submitted by Discovery Group I, the fund has increased its stake in the company to 5.1%, holding a total of 2.36 million shares, from 894,530 shares it held at the end of the quarter ended March 31, 2015. Making such a leap in ownership shows renewed confidence in the stock.
These developments are reflective of the first quarter when there was a lot of hedge fund activity surrounding the company. For example, Israel Englander‘s Millennium Management, raised its stake by a threefold to 67,800 shares. Moreover, other investors that own more substantial positions in Aerohive Networks Inc (NYSE:HIVE) are Ken Griffin’s Citadel Investment Group, Sahm Adrangi’s Kerrisdale Capital, and Anand Parekh’s Alyeska Investment Group.
Overall, a total of nine funds among those that we track reported long positions in Aerohive as of the end of March, up from seven investors a quarter earlier, but the aggregate value of their positions declined to $14.09 million, from $17.43 million.
Therefore, even though the number of funds holding the stock is relatively small, their sentiment seems to be optimistic about Aerohive’s prospects. Hedge funds are institutions that have the financial might and the capacity to carry out extensive research on a stock before moving forward to invest in it. It is therefore apparent that the stock has an attractive future.
Insider Selling and Legal Activities
In addition, Aerohive Networks Inc (NYSE:HIVE) has seen some large insider transactions over the past three months. Liu Changming, a director, sold around 8,400 shares in May worth around $58,032. On June 9, the same director again unloaded another 4,200 shares at $7.30 per unit on average, leaving him with 1.22 million shares, translating to 4.08% of the company’s stock. Directors Conway Rulon-Miller, John Gordon Payne, and Christopher Schaepe, among others, have made acquisitions over the past three months.
On the legal front, however, investors have been recently alerted by Law Offices of Howard G. Smith of ongoing investigations into claims of a possible violation of federal securities laws. The investigations are looking into whether or not the company misled its investors regarding its revenue and profit and are also touching on whether the company and its officers intentionally failed to disclose to investors that its sales results were way lower than its guidance.
Stock’s Performance and Results
Aerohive is a $330 million developer of a cloud-managed mobile platform. The company has recently sealed a deal with Dell Inc. and Apple Inc. (NASDAQ:AAPL) for the resell of its Cloud-Managed Wi-Fi and Mobility Solutions. The growing demand for technologically advanced platforms for enterprises and educational institutions are seen as openings that Aerohive is keen on exploring to expand its market share, sales, and profitability. Winning partnerships with such multinational companies is a step towards the right direction and good news for investors.
Aerohive Networks Inc (NYSE:HIVE) last issued its financial results on May 6. The stock posted a loss of $0.26 per share for the first quarter, in line with the estimates. This was on revenue of $25.80 million, coming slightly below analysts’ expectations of $26.80 million. The earnings represent notable year over year improvement, considering that the company posted a loss of $0.96 a year earlier. On a year-over-year basis, the company’s revenue declined by 8.5%.
Analysts’ Ratings
Analysts that have recently weighed in on Aerohive have confidence in the stock. Up to six analysts that have recently covered the stock have given it a “buy” recommendation, while the average target price amounts to $10.60 per share.
Analysts expect Aerohive Networks Inc (NYSE:HIVE) to post a loss of $0.68 per share for the current fiscal year, while for the current profit, the estimate stands at a loss of $0.21.
Conclusion
Considering the company’s products, there is no doubt that it has great prospects. The kind of enthusiasm displayed by Aerohive Networks Inc (NYSE:HIVE);s management to improve its products and strike deals with global entities is no doubt a sign of better things ahead.
Internet access is penetrating initially unreachable global locations, resulting in wider markets that these multinationals can explore to expand their market share while at the same time unlocking new markets for Aerohive.
If the management team continues with their relentless efforts and the shareholders continue to excite the stock, there is no doubt that Aerohive Networks Inc (NYSE:HIVE) remains a “buy” and would hit the “strong buy” territory.
Disclosure: none