The News that Prompted Furious Trading in These 4 Stocks Today

Sientra Inc (NASDAQ:SIEN), Select Medical Holdings Corporation (NYSE:SEM), Halozyme Therapeutics, Inc. (NASDAQ:HALO), and Micron Technology, Inc. (NASDAQ:MU) are each on the move today courtesy of various catalysts. In this article, we will take a closer look at the reasons investors are buying or selling each stock. Moreover, we will also examine relevant hedge fund sentiment towards these particular equities.

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 only the aristocrats of this group, around 730 funds. Contrary to popular belief, Insider Monkey’s research revealed that hedge funds underperformed in recent years only because of their short positions as well as the huge fees that they charge; they managed to outperform the market on the long side of their portfolio (see the details here).

Sientra Inc (NASDAQ:SIEN) has rallied another 10% today following its 11% advance on Friday, on the news that third party testers found the company’s medical implants safe and without substantial risk to patients. Sientra Inc (NASDAQ:SIEN) suspended sales of its breast implants in October, citing technical compliance difficulties at the company’s Brazilian contract manufacturing facility. If the FDA agrees with the third party testers, the company will have its devices back on the market again and its sales and cash flow metrics can bounce back. Given the greater than 7% of the float that is short, short covering could also have something to do with today’s rally.

Of the 730 elite funds that we track, ten of those owned $58.11 million worth of Sientra shares (accounting for 38.20% of the float) on September 30, versus six funds, though with $129.77 million worth of shares, a quarter earlier.

In other good news for shareholders, Select Medical Holdings Corporation (NYSE:SEM) is 7.34% higher today after the company released bullish business guidance for calendar year 2016. For the year, Select Medical expects net sales of $4.0 billion-to-$4.2 billion, adjusted EBITDA of $470 million-to-$510 million, and fully diluted income per common share of $0.72-to-$0.91. That’s assuming a 40% tax rate, and total shares outstanding of 132 million.

Select Medical Holdings Corporation (NYSE:SEM) operates a chain of specialty hospitals and outpatient rehabilitation clinics in the United States that will benefit from an aging population and increased medical coverage. Shares of the company trade at 12-times forward earnings based on the company’s top end EPS guidance. 23 elite funds held over 23% of the company’s float as of September 30. That was up by one elite fund from the end of June.

On the next page, we examine the latest on Halozyme Therapeutics Inc and Micron Technology Inc.

Halozyme Therapeutics, Inc. (NASDAQ:HALO) can’t escape the biotech slaughter today as its shares are down by 18.7% on the back of negative sector sentiment, with the iShares NASDAQ Biotechnology Index (ETF) (NASDAQ:IBB) 5.15% in the red in mid-afternoon trading as investors sell because of the prevailing ‘risk off’ sentiment. Because many biotech companies aren’t profitable or cash flow positive and depend on the public market for maintenance capital, their equity values can fall a lot in a short period of time if investors become anxious for whatever reason. Although there isn’t a new ‘Martin Shkreli’ moment or a massive lowering of a major bellwether’s earnings guidance, investors are concerned about the broader market and potential new drug pricing regulations if Hillary Clinton should win the Presidency this year. Hedge funds are cautiously optimistic on Halozyme Therapeutics, Inc. (NASDAQ:HALO), however, as the number of smart money funds long the stock increased by four to 24 by the end of the third quarter.

Micron Technology, Inc. (NASDAQ:MU) hit a new 52-week low today as sentiment around the stock continues to deteriorate. Shares of the company are off by 8% in afternoon trading as the stock recently closed below a key technical floor, likely prompting some stop-loss orders to be executed. Hedge fund sentiment around Micron Technology, Inc. (NASDAQ:MU) continued to decline in the third quarter, with 71 elite funds owning shares at the end of September, versus 79 funds long the stock at the end of June.

Disclosure: None