Market Overview

People Trading Out Of GoPro And Ambarella Into FitBit? This Analyst Thinks 'It's Very Possible'


Shares of GoPro Inc (NASDAQ: GPRO) and one of its main suppliers Ambarella Inc (NASDAQ: AMBA) slumped heavily on Monday, down 5.54 percent and 20.60 respectively. However, shares of recently listed wearables manufacturer Fitbit Inc (NYSE: FIT) went up 14 percent and according to Charlie Anderson, Dougherty & Company senior research analyst, there can be a connection between these two occurrences.

Anderson was on CNBC to explain that connection.


"We are neutral for valuation reasons," Anderson began. "The stock is trading roughly 9 times this year's sales, that's a little rich for a semi. We prefer a lower number to buy the shares, but we wouldn't say the stock is going to $60 or something like that. The fundamentals are pretty good with this name."

Why GoPro Went Down?

On GoPro following Ambarella's downward path, Anderson said, "These stocks will trade in sympathy with one another from time to time. I would say on GoPro, we put out a note today that we thought Father's Day was just kind of okay so there may be some independent issues there.

"You also should note that FitBit is actually doing quite well and it's very possible that some people are trading out of GoPro and the Ambrella and into FitBit. So, I think that's a possibility here as well."

GoPro And FitBit: Neighbors

Anderson was asked to explain why he thinks people might be trading out of GoPro and Ambarella and into FitBit. He replied, "We saw it on Friday. We saw FitBit trade up considerably, we saw GoPro back off a little bit. They're two very close stories, right? I mean, I noticed when I went to the stores this weekend, I mean, literally they are right next to each other so they are in competition for consumer dollars, but they're also in competition for shareholder money and they kind of live in the same neighborhood, if you will."

Posted-In: Charlie Anderson CNBC Dougherty & CompanyTech Media Trading Ideas


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