Why Fabrinet, Chemours, TriNet, FMC, and AXT Are Posting Big Gains Today

U.S. stocks are down considerably on Tuesday afternoon, driven by fears of a global economic slowdown, which have been renewed by feeble economic data out of China and Europe. However, as usual, a few stocks are moving in the opposite direction. Among the day’s big gainers, investors can look to Fabrinet (NYSE:FN), TriNet Group Inc (NYSE:TNET), FMC Corp (NYSE:FMC), Chemours Co (NYSE:CC), and AXT Inc (NASDAQ:AXTI), all of which are posting sizable gains on Tuesday. Let’s take a look into the events behind these spikes, and see what the hedge funds in our database think about each of these companies.

At Insider Monkey, we track more than 785 hedge funds, whose 13F filings we analyze as part of our small-cap strategy. Our research has shown that imitating a portfolio that includes the 15 most popular small-cap stocks among hedge funds can outperform the market by as much as 95 basis points per month on average (see more details here).

Fabrinet Surges on Strong Reuslts and Guidance

Let’s start with Fabrinet (NYSE:FN), a small-cap tech company that has witnessed its stock gain more than 11% since the bell rang this morning. The surge followed the announcement of the firm’s third quarter of fiscal year 2016 financial results after the market closed on Monday. Fabrinet reported earnings of $0.56 per share for the fiscal quarter, $0.03 above the Street’s consensus, on revenue of $250.9 million, which also beat expectations, by $8.1 million. Guidance for the fiscal fourth quarter was also strong, with the company predicting revenue of $260 million-to-$264 million, and EPS of $0.59-to-$0.61, eclipsing the consensus estimate of $250 million in revenue and $0.55 in EPS.

As of the end of 2015, Fabrinet (NYSE:FN) had 15 supporters among the hedge funds that we track, with their combined stakes accounting for almost 16% of the company’s shares. More recently, Donald Chiboucis’ Columbus Circle Investors disclosed a new position in the company comprising 299,957 shares as of March 31.

TriNet Spikes After Top and Bottom-Line Beats

Next up is TriNet Group Inc (NYSE:TNET), another small-cap that is up by almost 10% on Tuesday afternoon, driven by strong quarterly results of its own. First quarter EPS came in at $0.27, $0.02 ahead of estimates, while revenue rose by 14.6% year-over-year to $163.2 million, beating the Street’s consensus estimate by $13.37 million.

TriNet Group Inc (NYSE:TNET) was more popular among hedge funds than Fabrinet. As of December 31, 19 funds were long the stock and held 15.5% of the company’s float. Among them, we can count Eric Bannasch’s Cadian Capital, which declared holding 6.2 million shares of the company valued at more than $120 million as of the end of 2015.

Three more of the day’s big gainers are discussed on page two.

FMC Revenue Surges by 21.2%

Shares of FMC Corp (NYSE:FMC) are trading up by roughly 6.5% this afternoon following the announcement of the company’s first quarter financial results. The chemical firm posted EPS of $0.58, $0.05 above the Street’s consensus, on revenue of $799 million, up by 21.2% year-over-year, and $7.81 million ahead of estimates. In addition, management boosted its earnings guidance for 2016, with the company now expecting EPS of $2.55-to-$2.85 for the year, up from a prior outlook of $2.50-to-$2.80.

As of the end of 2015, 26 funds in our database held 17.8% of FMC Corp (NYSE:FMC)’s float. Among them was Larry Robbins’ Glenview Capital, which disclosed ownership of 11.89 million shares of the company as of the end of 2015.

Chemours Finally Becomes Profitable

Another chemicals firm among the day’s big gainers is Chemours Co (NYSE:CC), which is up by 5.6% in the early afternoon after the company delivered first quarter EPS of $0.06 on revenue of $1.3 billion, beating estimates by $0.04 and $30 million, respectively. It should be noted that this was the company’s first profitable quarter since it was spun off from E I Du Pont De Nemours And Co (NYSE:DD) in the middle of last year.

Among the firms that we keep track of, 22 were long Chemours Co (NYSE:CC) by the end of the fourth quarter. Their combined staked accounted for almost 20% of the company’s total outstanding stock by December 31.

Micro-Cap Also Outperforms

Finally, there’s AXT Inc (NASDAQ:AXTI), which is up by almost 25% following a top and bottom-line beat in the company’s latest quarterly financial results. After the bell rang on Monday, the micro-cap tech firm reported flat EPS for the quarter, $0.03 above the Street’s consensus, on revenue of $18.7 million, which beat estimates by $630,000.

Given its small market cap, AXT Inc (NASDAQ:AXTI) counted very few hedge fund supporters as of the end of 2015. On December 31, only three funds in our database held long positions in the stock. However, their positions did account for almost 14% of the company’s outstanding stock.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.