After falling sharply upon the ringing of the opening bell, the markets are making a comeback attempt of sorts. The Nasdaq, S&P 500, and Dow are each down by around 0.3% after being 0.6% in the red earlier in the day. Sentiment has been bolstered in part due to rumors that the ECB and Bank of England will backstop the financial markets if Britain leaves the EU. Among the stocks in the red today are Smith & Wesson Holding Corp (NASDAQ:SWHC), Western Gas Equity Partners LP (NYSE:WGP), Navistar International Corp (NYSE:NAV), Shire PLC (ADR) (NASDAQ:SHPG), and KemPharm Inc (NASDAQ:KMPH). Let’s dive in to why these stocks are sinking today and see what elite funds think of each of them.
Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).
Smith & Wesson Falls on Profit Taking
After surging yesterday due to early-Sunday’s tragic event in Orlando in which 49 people were killed at a gay nightclub, Smith & Wesson Holding Corp (NASDAQ:SWHC) shares are the victim of profit taking today. Shares of the gun-maker are down by 4.7% in afternoon trading, putting the stock close to where it traded before the weekend’s events. Although Smith & Wesson might experience a short-term bump in demand from the event, it is unclear whether the shooting in Orlando will increase demand for guns in the long run, especially if gun control laws in the U.S are tightened. 24 elite funds in our database were long Smith & Wesson Holding Corp (NASDAQ:SWHC) at the end of the first quarter.
Western Gas Deflates on Limited Partner Offering
Western Gas Equity Partners LP (NYSE:WGP) is almost 10% lower after the company announced that its limited partner, Western Gas Resources, priced a previously announced offering of 12.5 million common units representing limited partner interests. The gross proceeds to Western Gas Resources will be around $481 million. Underwriters also have a 30-day option to buy an additional 1.875 million shares. Western Gas Equity Partners, LP did not divest any units in the public offering. Jim Simons‘ Renaissance Technologies was a major shareholder of Western Gas Equity Partners LP (NYSE:WGP) at the end of March.
On the next page we examine why Navistar International, Shire PLC, and KemPharm are getting hit hard today.