It’s a red day on Wall Street as all three major indexes are in the red today, along with crude oil. Weighing on sentiment is the news that Saudi Arabia will IPO its state giant, Saudi Aramco, which could be worth $2 trillion or more on the open market. Given that Saudi Arabia plans to float 5% of the company’s shares (or $100 billion at a $2 trillion valuation), some traders are selling now to front run other traders who might sell the S&P 500 and Dow to buy Saudi Aramco shares in the future. Among the stocks deeper in the red than the indexes today are GoPro Inc (NASDAQ:GPRO), TrovaGene Inc (NASDAQ:TROV), Knowles Corp (NYSE:KN), Community Health Systems (NYSE:CYH), and Gerdau SA (ADR) (NYSE:GGB). Let’s find out why investors are selling these stocks and see what top hedge funds think of each of them.
Our research determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).
GoPro Drops on Analyst Comments
GoPro Inc (NASDAQ:GPRO) shares are off by around 4% after analysts at Pacific Crest remained skeptical that GoPro’s recent acquisitions and new software will improve its business enough. The analysts lowered their fiscal year 2016 earnings estimate to a loss of $0.77 per share from a loss of $0.56 per share and also trimmed their fiscal year 2017 earnings estimate to a loss of $0.93 per share from a loss of $0.77 per share, citing weakness in GoPro’s supply chain. One bright note is the expected launch of GoPro’s first drone product, Karma, which should come onto the market around the end of the second quarter. The analysts believe GoPro will sell 5 million-to-6 million of those units globally in the first year. 18 out of the 786 elite funds that Insider Monkey tracks owned shares of GoPro Inc (NASDAQ:GPRO) at the end of December.
Downgrade Weighs on TrovaGene
TrovaGene Inc (NASDAQ:TROV) is more than one-fifth lower today after analysts at Piper Jaffray downgraded TrovaGene’s stock to ‘Neutral’ from ‘Overweight’. The analysts have a new price target of $5.26 on it, whereas they previously had an $8 per share price target. In other news, Trovagene has a new boss, as former Sequenom, Inc. (NASDAQ:SQNM) CEO Bill Welch was named CEO effective immediately. Mr. Welch replaces Dr. Antoium Schuh, who was fired in March due to a breach in fiduciary duty. TrovaGene Inc (NASDAQ:TROV) was in the portfolios of seven of the elite funds that Insider Monkey tracks at the end of the fourth quarter, up one from the end of the previous quarter.
On the next page we examine why Knowles Corp, Community Health Systems, and Gerdau SA (ADR) are all sinking today.