Why Are These Five Tech Stocks on the Move Today?

The markets ended the Wednesday trading session on a positive note with major indices registering gains above 1%, boosted by the Fed’s announcement involving unchanged interest rates and hints to a very possible hike in December. However, in extended trading, as many companies reported their earnings, their stocks took off in different directions. Among them, GoPro Inc (NASDAQ:GPRO)‘s stock slumped by over 17% on the back of weaker than expected results. Another tech stock that lost ground in extended trading is Paypal Holdings Inc (NASDAQ:PYPL). On the other hand, Yelp Inc (NYSE:YELP), SunPower Corporation (NASDAQ:SPWR), and Cirrus Logic, Inc. (NASDAQ:CRUS) are trading higher on the back of solid results. Let’s take a closer look at the results disclosed by the five stocks and see if the hedge fund sentiment matches the overall market sentiment towards them.

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We at Insider Monkey assess the hedge fund sentiment by analyzing quarterly 13F filings of over 700 investors. Contrary to the general opinion, hedge funds are still very useful in identifying profitable opportunities among thousands of stocks. By imitating some of the hedge funds’ picks that they are collectively bullish on, we managed to beat the market substantially over the last couple of years. The key is to focus on their most popular small-cap picks, the 15 of which have returned 102% since August 2012, outperforming the S&P 500 ETF (SPY) by some 53 percentage points (see more details here).

Let’s take a look at the five tech stocks that caught our attention after the bell on Wednesday and their financial results. GoPro Inc (NASDAQ:GPRO) delivered a 43% revenue growth and 108% increase in adjusted EPS in year-on-year terms, but still missed the analysts’ projections amid weaker demand for its wearable cameras. The company’s revenue of $400.34 million missed the estimates of $434 million, while non-GAAP EPS of $0.25 came in $0.04 lower than expected. GoPro’s stock is already down by 52% year-to-date as consumers are getting more excited over the developing capabilities of smartphones in the video-shooting segment. However, the company delivered a 175% annual sales growth in Europe, the Middle East and Africa and Asia-Pacific combined and China has been its fastest growing market in its history, based on the first nine months of revenue. Amid the stock’s decline, smart money investors have also been fleeing GoPro Inc (NASDAQ:GPRO) and at the end of June, 21 funds among those we follow reported long stakes in the company, equal to around 10% of its outstanding stock and down by four compared to the previous quarter.

Paypal Holdings Inc (NASDAQ:PYPL)‘s shares were also sent down in after-market after the company had reported revenue of $2.26 billion, up by 14% on the year and net income of $0.25 per share, compared to $0.19 delivered a year earlier. The company has separated from eBay Inc (NASDAQ:EBAY) earlier this year and it was its first financial report as an independent company. However, the revenue missed the Street’s estimates of $2.27 billion, but adjusted earnings of $0.31 per share came in higher than the $0.29 expected. Paypal Holdings Inc (NASDAQ:PYPL) also said that it gained market share during the third quarter and had a 27% annual growth in total payment volume on an FX neutral basis to $70 billion. The number of transactions went up by 38% on the year to 345 million. For the full year, PayPal said it expects a 15% – 18% growth in net revenue on an FX neutral, non-GAAP basis and non-GAAP earnings per share between $1.23 and $1.27. Mario Gabelli’s GAMCO Investors reported holding 491,221 shares of Paypal Holdings Inc (NASDAQ:PYPL) as of the end of September.

On the next page we are going to take a look at three companies whose stocks appreciated in after-market on the back of the earnings release.

SunPower Corporation (NASDAQ:SPWR), which is one of the largest maker of solar panels in the US, posted revenue of $380.2 million, down by 43% on the year, and a loss of $0.41 per share compared to a profit of $0.20 a year earlier. The results sent the stock 6% in the green after the bell, as the non-GAAP profit of $0.13 was above the estimates of a loss of $0.01, while non-GAAP revenue of $441.4 was better than $428.88 million projected by analysts. For the fourth quarter and full-year, SunPower Corporation (NASDAQ:SPWR) currently expects non-GAAP revenue in the range of $1.25 billion to $1.30 billion and between $2.50 billion and $2.55 billion, respectively. Its EBITDA guidance was also increased to the range of $475 million to $500 million from $425 million – $475 million presented earlier. However, among the funds from our database, SunPower Corporation (NASDAQ:SPWR) lost a lot of popularity as the number of funds from our database with long positions slumped to 17 from 35 during the second quarter and the total value of their stakes was equal to 3% of the company at the end of June.

Yelp Inc (NYSE:YELP)‘s shares are also trading higher on the back of the third-quarter results, which included revenue of $143.56 million, up from $102.46 million a year earlier, and a net loss of $0.11 per share, compared to a profit of $0.05 in the third quarter of 2014. The revenue was better than the $141.42 million expected by the Street, but the net loss per share was higher than anticipated. For the fourth quarter and full-year, the company expects net revenue in the ranges of $149.5 million to $154.5 million, and $545.5 million to $551.5 million, which is close to the current analyst estimates. Investors were surprised by the results, as Yelp Inc (NYSE:YELP)’s stock was losing ground for the last two days straight and it is down by nearly 60% year-to-date. During the second quarter, the number of funds bullish on Yelp Inc (NYSE:YELP) surged to 44 from 29 and they held 33% of its outstanding stock at the end of June.

Cirrus Logic, Inc. (NASDAQ:CRUS)‘s stock already closed nearly 8% higher on Wednesday, dragged by solid results reported by Apple (see details), and gained another 4% in aftermarket on the back of its own results. The company posted net sales of $306.76 million for the second quarter of fiscal 2016 and non-GAAP EPS of $0.65, higher than $210.21 million and $0.54 delivered a year earlier. The Street expected EPS of $0.59 on revenue of $306.58 million. Moreover, the fourth quarter revenue outlook of $370 to $400 million is in line with estimates of $374 million. A total of 25 funds held shares of Cirrus Logic, Inc. (NASDAQ:CRUS) at the end of June, owning around 10% of its outstanding stock in aggregate.

Disclosure: none