After an almost-flat Tuesday, the markets are back to tumbling today. The three major U.S stock indexes (the Dow Jones, S&P 500, and NASDAQ) were all down by about 3% by midday, with stocks like Goldman Sachs Group Inc (NYSE:GS), International Business Machines Corp. (NYSE:IBM), Apple Inc. (NASDAQ:AAPL), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Metlife Inc (NYSE:MET) leading the declines. We’ll take a look into the events driving the large drops in these stocks, as well as at how the funds in our database feel about said companies.
While there are many metrics that investors can assess in the investment process, hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).
Back to the stocks that interest us, there’s Goldman Sachs Group Inc (NYSE:GS), which is trading down by almost 3% this afternoon, after the company announced its fourth quarter financial results before the morning bell. The financial and bank holding company reported earnings of $4.68 per share on revenue of $7.27 billion, well above expectations. However, these figures exclude a legal settlement with the U.S government, which cost the company $5 billion, or $3.41 per share. Taking this into account, actual earnings fell to $1.27 per share, the lowest in four years.
As many investors know, Warren Buffett’s Berkshire Hathaway is one of the largest institutional investors of Goldman Sachs Group Inc (NYSE:GS). Buffett’s holding company disclosed ownership of more than 10.95 million shares of the company as of the end of the third quarter. However, over the period, the firm trimmed its holding by 14%. Other funds are also turning away from Goldman Sachs Group Inc (NYSE:GS); over the third quarter, the number of funds in our database long the stock fell to 63 from 67.
On the following pages, we will take a look into the reasons behind the declines in International Business Machines Corp. (NYSE:IBM), Apple Inc. (NASDAQ:AAPL), Advanced Micro Devices, Inc. (NASDAQ:AMD) and Metlife Inc (NYSE:MET).