Hedge Funds Regret Buying These Stocks in Q4

Moving on, led by the news that media mogul Oprah Winfrey had acquired a minority stake in the company, shares of Weight Watchers International, Inc. (NYSE:WTW) rallied by nearly 270% during the fourth quarter. The news also served to increase hedge funds’ interest in the stock, as the ownership of the company increased to 24 from 14 among the investors in our database, while the aggregate value of their holdings in the company jumped by a whopping 934% to $263.95 million during the fourth quarter. However, the news and financial numbers coming out of the company this year have put Weight Watchers International, Inc. (NYSE:WTW) shares on a diet, as it trades down by over 40% year-to-date. The company recently reported a loss of $0.03 per share on revenue of $259.20 million for the fourth quarter, whereas the consensus among analysts was for it to report EPS of $0.03 on revenue of $257.21 million. Along with its earnings release, the company also revealed that its active subscribers declined by 4.8% year-over-year to 2.39 million and that the Oprah deal cost it $0.10 per share in expenses. Andrew Feldstein and Stephen Siderow‘s Blue Mountain Capital initiated a stake in the company during the fourth quarter; it held 2.00 million shares of Weight Watchers International, Inc. (NYSE:WTW) as of December 31.

The biotech sector has suffered a severe contraction during the recent turmoil in the stock market, and Alkermes Plc (NASDAQ:ALKS) has emerged as one of the worst performing stocks within that sector, losing over 58% of its value since the beginning of 2016. The final quarter of 2015 was a completely different story for Alkermes Plc (NASDAQ:ALKS)’s stock. Amid a 33% rise in the stock during that period, its ownership among the hedge funds that we follow climbed to 34 from 22 and the aggregate value of those hedge funds’ holdings soared to $795.5 million from $523.17 million. Although the stock had already given up all of the gains it made during the fourth quarter by January 19, it slumped further on January 20 after reports emerged that its drug for major depressive disorder did not meet its main goal of improving depression symptoms in two late-stage studies. On February 22, Goldman Sachs analysts reduced their target price on the stock to $35 from $53. Billionaire David E. Shaw‘s firm D.E. Shaw made a fifteen-fold increase to its stake in Alkermes Plc (NASDAQ:ALKS) during the October-to-December period, to 266,770 shares.

Wearables manufacturer Fitbit Inc (NYSE:FIT) was listed with heavy fanfare last year, but in less than a year its stock is trading more than 35% lower than its IPO price. It is also the only company in this list whose shares declined during the fourth quarter, by 20%. Nonetheless, it saw an increase in its popularity among the hedge funds in our system, which clearly anticipated a turnaround, as their ownership of the stock increased by seven to 20 funds, while the aggregate value of their holdings in it increased by 87.7% to $350.5 million. Though the company recently delivered an earnings and revenue beat for the fourth quarter, its shares failed to take off due to the lower guidance it provided for the first quarter of 2016, pushing Fitbit Inc (NYSE:FIT)’s stock down to trade at 58% in the red year-to-date. The unprecedented growth in shipments of the Apple Watch and the fears of the second version of the Apple Watch reducing Fitbit’s market share even further seem to be the main reasons why the company’s stock has fallen from a cliff over the past few months. Interestingly, Fitbit Inc (NYSE:FIT)’s stock has followed the same trajectory since August as the stock of another notable wearable manufacturer, GoPro Inc (NASDAQ:GPRO). Philippe Laffont‘s Coatue Management initiated a stake in Fitbit in the fourth quarter, purchasing over 1.5 million shares.

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