Why Are These Stocks On The Move Today?

With the three major indexes slightly in the red for today after Monday’s brutal sell-off, GoPro Inc (NASDAQ:GPRO), Micron Technology, Inc. (NASDAQ:MU), Auris Medical Holding AG (NASDAQ:EARS), Progressive Waste Solutions Ltd (USA) (NYSE:BIN), and Avid Technology, Inc. (NASDAQ:AVID) are moving driven by different catalysts that we are going to discuss in this article.

In addition, let’s analyze hedge fund sentiment toward the stocks, if relevant. But why do we track hedge fund activity? From one point of view we can argue that hedge funds are consistently underperforming when it comes to net returns over the last three years, when compared to the S&P 500. But that doesn’t mean that we should completely neglect their activity. There are various reasons behind the low hedge fund returns. Our research indicated that hedge funds’ long positions actually beat the market. In our back-tests covering the 1999-2012 period hedge funds’ top small-cap stocks edged the S&P 500 index by double digits annually. The 15 most popular small-cap stock picks among hedge funds also have bested passive index funds by around 53 percentage points since September 2012 (see the details here).

Swimming against the tide of downgrades, the analysts at JPMorgan defended GoPro Inc (NASDAQ:GPRO) today, mentioning that channel checks show GoPro’s Hero 4 models selling briskly during the holiday season. The analysts noted that “interest in the GoPro product family remains robust, judging by Google Trends search metrics during 2015 X-mas pointing to levels last seen during the initial product launch in Oct 2014”, and believe the channel checks and strong interest could lead GoPro Inc (NASDAQ:GPRO) to beat expectations for its fourth quarter. JPMorgan has a $45 price target on the stock. The hedge fund sentiment towards GoPro has become more optimistic, with the number of funds from our database long the stock rising by four to 25 during the third quarter. Shares of the action camera maker rallied above $20 earlier in the morning before retracting.

Micron Technology, Inc. (NASDAQ:MU) shares are 4.6% higher as the end of the year tax-loss selling no longer weighs on the stock. Although Micron Technology, Inc. (NASDAQ:MU)’s guidance is disappointing with management expecting a second-quarter loss between $0.05 to $0.12 per share, many hedge funds still believe in the company. David Einhorn’s Greenlight Capital was among the 71 elite funds that were long the stock at the end of the third quarter.

On the next page, we examine Auris Medical Holding, Progressive Waste Solutions, and Avid Technology.

The rally in Auris Medical Holding AG (NASDAQ:EARS) continues as the stock of the clinical-stage biopharmaceutical company that focuses on the development of novel products for the treatment of inner ear disorders has surged by another 16% today. Auris Medical Holding AG (NASDAQ:EARS) recently closed above a key technical moving average and some traders are evidently betting that the stock’s momentum can continue. Three funds among those we track owned $3.95 million worth of Auris shares at the end of September.

Not to be left out, Progressive Waste Solutions Ltd (USA) (NYSE:BIN) is trading 5.7% higher after the company said that its board of directors “has commenced a review of strategic alternatives with the objective of enhancing shareholder value.” Progressive Waste Solutions has retained JPMorgan as a financial adviser. Shares are rising because any potential buyer would have to pay a substantial premium to get a deal with Progressive Waste Solutions Ltd (USA) (NYSE:BIN). Jim Simons’ Renaissance Technologies owned 1.85 million shares of the company at the end of September.

Moving on, Avid Technology, Inc. (NASDAQ:AVID) shares have gained over 6% after the company updated its 2015 bookings guidance to $536 million from the previous range of $490 – $503 million. The company cited the following as reasons for the updated guidance:

“The adoption of Avids unique enterprise-wide platform-based approach continues to build momentum and is a further proof point that Avids transformation strategy is working, underscoring Avids growth potential. The recent announcement of a record ten-year managed services contract with Sinclair Broadcast Group highlights a year that saw strong adoption of the Avid platform by some of the most sophisticated global media organizations.”

Hedge fund sentiment towards Avid Technology, Inc. (NASDAQ:AVID) has been stable with the number of elite funds from our database long the stock unchanged at 19 quarter-over-quarter. These funds amassed 33.4% of Avid’s float at the end of September.

Disclosure: none