Four Energy and One Communications Stock Among Today’s Biggest Losers

After a strong sell-off at the end of the last week, U.S. stocks are having a breather at the moment, trading sideways for most of the day. Although there seems to be a mostly positive mood in the market, several stocks have dipped in the red. Let’s find out why investors are pushing Rex Energy Corporation (NASDAQ:REXX), Seadrill Partners LLC (NYSE:SDLP), SolarCity Corp (NASDAQ:SCTY), Southwestern Energy Company (NYSE:SWN) and Frontier Communications Corp (NASDAQ:FTR) lower today.

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Rex Energy Corporation (NASDAQ:REXX) plunged this morning, after the stock was downgraded by analysts at KeyBanc Capital Markets. The firm has reduced its rating to ‘Sector Weight’ from ‘Overweight’. KeyBanc left the price target untouched at $3.5 per share. Rex’s shares are currently trading at $1.10 apiece, down by more than 5% from yesterday’s closing price.

Hedge funds are not keen on Rex Energy Corporation (NASDAQ:REXX), with only five funds from our database reporting a position in the stock at the end of the third quarter, down from seven at the end of June. David E. Shaw’s D E Shaw holds the largest stake in the company among the funds we follow, having reported ownership of 635,775 shares, up by 24% over the quarter.

Shares of Seadrill Partners LLC (NYSE:SDLP) are also down by 5%, after the company announced its intention to cut its quarterly distribution by 56% to $0.25 per share. The main reason for this reduction is the continuous weakness in the offshore drilling business. The low oil prices are not helping either. Seadrill Partners will, instead, focus on repaying some of its debt, improving liquidity and saving up for maintenance and replacement works.

At the end of September, less than 1% of Seadrill Partners LLC (NYSE:SDLP)’s common stock was held by six funds, unchanged over the quarter. In its latest 13F filing, Israel Englander‘s Millennium Management reported a 150% increase in its holding of the stock to 101,571 shares valued at $955,000.

SolarCity Corp (NASDAQ:SCTY) threatens to stop operations in Nevada if the state’s Public Utility Commission passes a proposal to alter net metering rules. The commission is set to vote today on a proposal to install a two-part tariff, which would include a service charge and a commodity fee based on volume. SolarCity has vehemently opposed this proposal, saying that it would destroy the solar industry in Nevada. Shares of SolarCity opened lower today and have continued to fall, currently down by roughly 5%.

Hedge fund sentiment towards SolarCity Corp (NASDAQ:SCTY) has slightly deteriorated during the quarter, as the number of hedge fund long positions decreased by 5 and stood at 29 at the end of September. Joshua Friedman and Mitchell Julis, the managers of Canyon Capital Advisors, are bullish on the stock and have boosted their investment by 47% to amass 4.45 million shares by the end of the quarter.

Southwestern Energy Company (NYSE:SWN) is down by 3% today, while the industry in general is rallying on higher oil prices. The stock has been in a bearish trend most of the year, losing nearly 80% of its value. The main reason for the plunge is the slump in energy markets, with oil prices reaching multi-year record lows this week. In its latest financial report, Southwestern Energy reported a 20% drop in revenues to $749 million, while earnings decreased by 65% to $0.21 per share.

A number of top funds have used the opportunity to buy Southwestern Energy Company (NYSE:SWN) on a low, as the total number of funds invested grew to 38 at the end of the third quarter from 33 a quarter earlier. Steve Cohen was among those buying, having increased his holding of the stock by 11% to 2.87 million shares valued at $36.4 million at the end of September.

Frontier Communications Corp (NASDAQ:FTR) stock is down by 2% this morning, while the industry in general is barely holding on to gains. The stock has registered a sharp decline in the first half of the year, before settling around the $5 level. Frontier shares are currently trading at $4.55, down 32% for the year. Although revenues improved during the third quarter, rising by 24% to $1.42 billion, the loss per share widened to $0.04 per unit as the company struggled to integrate the Connecticut business it acquired from Verizon Communications Inc. (NYSE:VZ).

Value investor Seth Klarman sees great upside potential in Frontier Communications Corp (NASDAQ:FTR), having initiated a position in the second quarter. As of the end of the third quarter, Klarman’s Baupost Group has not reported any change in its position, continuing to hold 13.5 million shares worth $64.1 million. In general, hedge funds were shying away from Frontier Communications, with the number of long positions decreasing to 33 by the end of September from 41 a quarter earlier.

Disclosure: none.