Institutional managers have just released their latest 13Fs, which contain information on changes in their holdings during the preceding quarter. Here is a summary of what our reference funds did with their holdings of the Brain Trust Profits stocks in the fourth quarter.

Net Increases:

BlackRock, AngioDynamics (NASDAQ: ANGO), by 1%.

Shapiro Capital Management, ChannelAdvisor (NYSE: ECOM), by 5%.

Cadian Capital Management, Jazz Pharmaceuticals (NASDAQ: JAZZ), by 9%.

Tiger Global Management, TAL Education (NYSE: TAL), by 2%.

And in regards to our newest buy, Itron Inc. (NASDAQ: ITRI), Marcato Capital Management bought 468,100 additional shares, a 119% increase.

No Changes:

Tiger Global Management, Despegar.com (NYSE: DESP).

Cascade Investment, Republic Services (NYSE: RSG).

Third Point, Sotheby’s (NYSE: BID).

Baupost Group, Synchrony Financial (NYSE: SYF).

Net Decreases:

Marcato Capital Management, AAR Corporation (NYSE: AIR), by 6%.

Glenview Capital Management, IQVIA Holdings (NYSE: IQV), by 3%.

In regards to AIR and IQV, these two reference funds both reduced positions in almost all of their top holdings; so it appears both funds are merely rebalancing their portfolios. In fact, the size of the position reductions in AIR and IQV are quite mild compared to the size of the reduction in their other top positions. Thus, the slight reductions on their own aren’t enough to persuade us to sell these stocks.

In the case of Marcato, its large bet on Itron (our latest portfolio addition) while paring them most of its top positions is one reason the stock caught our eye.

If either fund had decreased its position in AIR and IQV, respectively, while buying more shares of their other top holdings, that would be a sign that they no longer view the stocks highly, and we would be more concerned and likely take action.

ChannelAdvisor Underwhelms

This week, ChannelAdvisor reported mixed quarterly results (missing on revenues and beating on adjusted earnings per share). And first-quarter guidance fell short of expectations.

The company projects first-quarter revenues of $29.4 to $29.8 million, below analysts’ consensus estimates of $31.1 million. It forecasts full-year revenue in the range of $128 million to $130 million; this, too, is below expectations ($134 million).

Some Signs of Improvement

Despite the negative market reaction, there is some reason to be positive: gross merchandise volume (GMV)—the volume of purchase activity—actually accelerated as 2017 progress. CEO David Spitzer noted that he was especially encouraged by the activity on Amazon, ChannelAdvisor’s largest channel.

Back in late 2016, ChannelAdvisor experienced a sharp slowdown in GMV growth on Amazon. But by the fourth quarter of 2017, year-over-year growth had increased to 24% and GMV eclipsed $1 billion for the first time. Since ChannelAdvisor collects commission on sales, the more transactions there are, the better it is for the company. Spitzer commented that the Amazon momentum continued in January.

He also said that GMV on eBay—ChannelAdvisor’s second largest channel—also accelerated, from low single digits early in 2017 to low double digits in the fourth quarter. So we’d definitely want to see a beat when the company next reports in May.

Spitz blames the fourth-quarter revenue slight miss on disappointing sales activity of one of its (unnamed) marketplace partners (not Amazon or eBay). This partner had an estimated negative impact of $500,000 in revenue on ChannelAdvisor in the quarter.

2018 Should Be Better

Spitz noted he is was pleased with “tangible improvements” in sales productivity from his sales team as the company achieved its first new-bookings growth since 2014.

Average revenue per user also increased by 9% to more than $42,000 as the company concentrates on getting larger customers.

So despite the lower-than-expected guidance, there are some positive signs for the company. The low guidance looks to be a case of the company wanting to be conservative due to uncertainty about variable revenue, which account for roughly a quarter of its total revenue. In other words, there’s a decent chance the company will beat its own guidance.

Still, ChannelAdvisor is in a spot where it needs to show some strong results to get back into investors’ good graces. Helping its case from our perspective is the fact that, as mentioned above, reference fund Shapiro Capital Management, upped its bet on the stock. As a result, we will exercise patience. We do want to see some further tangible signs of growth acceleration, however.

IQVIA’s Momentum Continues

IQVIA also reported this week. The company beat both revenue and earnings expectations. It also issued an EPS guidance of $5.35 to $5.60 for 2018 and $1.23 to $1.30 for the first quarter, both better than analyst expectations.

The demand for IQVIA’s new Next-Gen products looks strong and overall, and bookings for Next-Gen have increased to $1.2 billion. 2017 was IQVIA’s first full year after its formation via the Quintiles and IMS Health merger. The company exited 2017 with momentum and it looks like the momentum will continue in 2018.

We will look for continually improving results from IQVIA as the year progresses.

The stock rose 4% on Wednesday in reaction to the strong quarter and strong guidance, but was unable to sustain the momentum on Thursday.

Analysis of Itron to Come

We added Itron to our portfolio yesterday. We will have a detailed analysis next week.