Why These Five Stocks Are Gaining Today

After a ‘flattish’ Thursday, markets were surging on Friday, with all major US stock indexes up by more than 1%. Among the stocks accompanying the rise in the markets, we could highlight Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA), Finisar Corporation (NASDAQ:FNSR), Southwestern Energy Company (NYSE:SWN), Seadrill Ltd (NYSE:SDRL) and Weatherford International Plc (NYSE:WFT), all of which were trading up by double digits. So, let’s take a look at the events behind these moves and see what the hedge funds in our database think about these companies.

At Insider Monkey, we track more than 700 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).

Back to the stocks that interest us, let’s start with Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA), whose stock is trading up by more than 16% on Friday. After the market closed on Thursday, the beauty retailer posted earnings of $1.69 per share, $0.15 above the Street’s consensus estimate, on revenue of $1.27 billion, up by 21% year-over-year, and $40 million ahead of expectations. The guidance also surprised analysts and investors as the management said it expects first-quarter earnings in the range of $1.25 to $1.30 per share on revenue between $1.02 billion and $1.03 billion. Analysts, on the other hand, forecast earnings of $1.23 per share on revenue of $1.01 billion. In addition the company announced a new $425 million share repurchase program, and plans to enter a $200 million “accelerated” buyback program.

Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ:ULTA) is quite popular among the funds that we track. At the end of the fourth quarter of 2015, the company saw 31 funds with long positions equal to more than 15% of its outstanding stock. Among them, we could point out Stephen Mandel’s Lone Pine Capital, which last disclosed ownership of 3.57 million shares, worth more than $661 million at the end of December.

Next up is Finisar Corporation (NASDAQ:FNSR), whose stock has gained almost 19% after beating the earnings estimates and providing a solid guidance. The small-cap optical subsystems and components provider reported earnings of $0.25 per share, $0.03 above expectations, on revenue of $309.2 million, which, however, missed the estimates by $2.77 million. Guidance for the current quarter was also strong with EPS in the range of $0.22 to $0.28, versus a consensus estimate of $0.21, and revenue between $307 million and $327 million, in line with the $314.7 million expected by analysts.

A total of 20 firms among those we track disclosed long equity stakes in Finisar Corporation (NASDAQ:FNSR) as of December 31; these positions accounted for more than 15% of the company’s outstanding stock. Among them, the largest shareholder was Ken Fisher’s Fisher Asset Management, which owns 4.04 million shares, according to its latest 13F filing.