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4 Stocks Feeling The Heat From Downgrades, Weak Earnings

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While the Dow Jones Industrial Average and S&P 500 indexes rebounded by midday after opening in the red this morning, shares of Uni-Pixel Inc. (NASDAQ:UNXL), Tech Data Corp. (NASDAQ:TECD), Infoblox Inc. (NYSE:BLOX), and Exact Sciences Corporation (NASDAQ:EXAS) have not been so lucky, continuing to reside in negative territory on news including an analyst downgrade, a public offering, and an earnings report. We will take a look at what the funds from our database think about these stocks later in the article as well.

We track hedge funds and prominent investors because our research has shown that historically, their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 50 most popular large-cap stocks among hedge funds had a monthly alpha of about six basis points per month between 1999 and 2012; however the 15 most popular small-cap stocks delivered a monthly alpha of 80 basis points during the same period. This means investors would have generated 10 percentage points of alpha per year simply by imitating hedge funds’ top 15 small-cap ideas. We have been tracking the performance of these stocks since the end of August 2012 in real time and these stocks beat the market by 53 percentage points (102% return vs. the S&P 500’s 49% gain) over the last 38 months (see the details here).

Uni-Pixel Inc. (NASDAQ:UNXL) has crumbled by 52.17% today, falling under $1 per share in the process after agreeing to sell 9.63 million shares of common stock in a public offering to raise $7.1 million in net proceeds. Specifically, the company entered into individual subscription agreements with investors in which they will pay $0.85 per unit, in which one unit consists of one share of Uni-Pixel’s common stock and one warrant to purchase one share of its common stock. The warrants have an exercise price of $1.50 per share and have a term of five years from the date of issuance, according to a Form 8-K filed today. Roth Capital Partners LLC will serve as the lead placement agent and Ladenburg Thalman will serve as the co-placement agent in said offering.

Through the end of September, Just three out of the 730 funds in our database held positions in the stock, though they combined to hold 13.90% of Uni-Pixel Inc. (NASDAQ:UNXL)’s outstanding shares. Top investor Sander Gerber‘s Hudson Bay Capital Management holds 1.85 million shares of the company as of the end of September.

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After reporting a 5% decrease in net sales for the third quarter to $6.43 billion, shares of Tech Data Corp. (NASDAQ:TECD) have withdrawn by 10.26% today. On the other hand, it did book higher operating income at $68.1 million and it grew its net income to $41.9 million or $1.18 per share, based on GAAP measures, though this nonetheless fell short of estimates of $1.33.

“On a constant currency basis, we posted good top line growth, improved non-GAAP operating income by nearly twice the rate of sales growth, and grew non-GAAP earnings per share by 19 percent to a record Q3 level. Additionally, for the first nine months of the fiscal year, we grew non-GAAP earnings per share by 31 percent on a constant currency basis, generated $221 million of cash from operations, and completed $147 million of share repurchases,” Tech Data CEO Robert Dutkowsky said in the earnings release.

25 funds in our database held a total of 8.10% of Tech Data Corp. (NASDAQ:TECD)’s outstanding stock on September 30. Joel Greenblatt‘s Gotham Asset Management held shares in the company valued at $60.16 million on that date.

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