Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

How Do Hedge Funds View These 3 Downgraded Stocks?

Page 1 of 2

Shares of Illumina, Inc. (NASDAQ:ILMN), Crocs, Inc. (NASDAQ:CROXand AGCO Corporation (NYSE:AGCO) are lower after analysts downgraded each company. Illumina is down by 7.8%, Crocs is lower by 9.8%, and AGCO is off 7.2% in morning trade as the downgrades weigh on supply and demand. Let’s take a closer look at the three stocks and see if the world’s greatest investors disagree with analysts on any of them.

10 best industries to invest in

In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8,000 funds in operation at present, Hedge fund experts at Insider Monkey look at the aristocrats of this group, around 700 funds. Contrary to popular belief Insider Monkey’s research revealed that hedge funds underperformed in recent years because of their short positions as well as the huge fees that they charge. Hedge funds managed to outperform the market on the long side of their portfolio. In fact, the 15 most popular small-cap stocks among hedge funds returned 118% since the end of August 2012 and beat the S&P 500 Index by 60 percentage points (see more details here).

Follow Illumina Inc (NASDAQ:ILMN)
Trade (NASDAQ:ILMN) Now!

Analysts at Leerink downgraded Illumina, Inc. (NASDAQ:ILMN) to ‘Market Perform’ from ‘Outperform’ and lowered their target price to $185 from $225. The analysts think the risk/reward is “less compelling over the next 12 months”. They like Illumina’s nextgen sequencing technology, but they consider that the company lacks meaningful upside growth catalysts over the next year. Shares of the biotech company had been off 4.7% year-to-date before the downgrade.

However, hedge funds are bullish on Illumina, Inc. (NASDAQ:ILMN). Of the funds from our database, 64 funds owned $3.94 billion worth of the company’s shares (representing 12.50% of the float) on June 30, versus 75 funds and $3.63 billion respectively a quarter earlier. Stephen Mandel‘s Lone Pine Capital increased its position by 97% to 5.68 million shares, while Philippe Laffont’s Coatue Management boosted its stake by almost a sixfold to 658,493 shares. David Goel and Paul Ferri’s Matrix Capital Management kept its position the same at 500,000 shares. Just 3.5% of the float is short.

Follow Crocs Inc. (NASDAQ:CROX)
Trade (NASDAQ:CROX) Now!

Analysts at Piper Jaffray cut their rating on Crocs, Inc. (NASDAQ:CROX) to ‘Neutral’ from ‘Overweight’ and reduced their price target to $12 from $17, saying that the stock ‘will likely be dead money for the foreseeable future until [they] gain more concrete evidence of sales acceleration’. Crocs slashed its sales estimates on its analyst day on Wednesday. Shares of the former fad stock were up 3.5% year to date before the update from the analysts.

Hedge funds are mixed on Crocs, Inc. (NASDAQ:CROX), since 23 funds owned $120.82 million of the company’s shares (representing 10.70% of the float) at the end of June, versus 17 funds holding stakes worth $130.16 million three months earlier. Among them, Orlando Muyshondt‘s Tyrian Investments established a new position of 1.66 million shares, while Jeffrey Jacobowitz’s Simcoe Capital Management increased its stake by 1% to 783,243 shares. Steve Cohen’s Point72 Asset Management decreased its holding by 71% to 608,755 shares, while Thomas Ellis and Todd Hammer’s North Run Capital pruned its position by 20% to 1.05 million shares too. Currently, around 16% of Crocs’ float is short.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!