The markets are trading in the red on Friday despite better-than-expected inflation data, as anxious investors await the Federal Reserve’s policy meeting scheduled for next week. According to the US Commerce Department, the Consumer Price Index (CPI) increased by 0.2% in August, versus the expected 0.1% gain.
Among the stocks that are losing value today are VimpelCom Ltd (ADR) (NASDAQ:VIP), Concordia International Corp (NASDAQ:CXRX), Royal Bank of Scotland Group PLC (NYSE:RBS), Credit Suisse Group AG (ADR) (NYSE:CS) and Gerdau SA (ADR) (NYSE:GGB). Let’s find out why these stocks are plunging and also see what the smart money thinks of them.
Through extensive research that covered the portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).
Telenor Reducing Stake in VimpleCom
VimpelCom Ltd (ADR) (NASDAQ:VIP)’s stock has lost 4% of its value after the company’s co-owner Telenor ASA said that it was selling 142.5 million VimpelCom ADSs, or about 8.1% of its stake in the Netherlands-based telecom company. Telenor said its underwriters had priced its offering of VimpelCom’s American Depositary Shares (ADSs) at a price of $3.50 per ADS, resulting in net proceeds to Telenor of about $486.28 million. Telenor has given the underwriters a 30-day option to buy up to 21.37 million additional ADSs. The offering is expected to close on or about September 21. VimpelCom will not receive any of the proceeds from the sale. A total of ten hedge funds in our database were long VimpelCom Ltd (ADR) (NASDAQ:VIP) as of the end of the second quarter.
UK Government Readying to Take Control of Drug Pricing
Concordia International Corp (NASDAQ:CXRX)’s stock is getting hammered today, losing over 17% after the UK’s Health Service Medical Supplies (Costs) Bill was proposed in the House of Commons on Thursday, which would prevent drug companies from raising the price of common drugs, which Concordia was singled out for having done by the U.K’s National Health Service earlier this year. The proposed bill, if approved, will amend the National Health Service Act 2006, allowing the government to control drug pricing and apply penalties and fines. Concordia is already under $3 billion of debt and its U.S. business in facing formidable challenges. 15 hedge funds in our system were bullish on Concordia International Corp (NASDAQ:CXRX) as of the end of June.
On the next page, we’ll discuss why shares of Royal Bank of Scotland, Credit Suisse and Gerdau are losing value today.