With many market participants on edge given the impending FOMC meeting next week and the plunging crude prices, shares of Kite Pharma Inc (NASDAQ:KITE), Qunar Cayman Islands Ltd (NASDAQ:QUNR), Coherus Biosciences Inc (NASDAQ:CHRS), and Oxford Industries Inc (NYSE:OXM) are off substantially in afternoon trading for various reasons. Let’s find out why investors are selling and analyze what the world’s greatest investors think of each stock.
Most investors don’t understand hedge funds and indicators that are based on hedge funds’ activities. They ignore hedge funds because of their recent poor performance in the bull market. Our research indicates that hedge funds underperformed because they aren’t 100% long. Hedge fund fees are also very large compared to the returns generated and they reduce the net returns experienced by investors. We uncovered that hedge funds’ long positions actually outperformed the market. For instance the 15 most popular small-cap stocks among funds beat the S&P 500 Index by 53 percentage points since the end of August 2012. These stocks returned a cumulative of 102% vs. a 48.7% gain for the S&P 500 Index (see the details here). That’s why we believe investors should pay attention to what hedge funds are buying (rather than what their net returns are).
Leading the way on our list of falling stocks is Kite Pharma Inc (NASDAQ:KITE), whose shares are off by more than 7% today as the stock remains volatile after the company presented at the American Society of Hematology’s annual meeting from December 5-to-December 8. Given that shares are still up by over 20% year-to-date, some investors are no doubt taking profits and that’s playing a part in today’s sell-off. Our data shows that hedge funds are bullish on the company, with 22 elite funds owning $384.4 million worth of Kite shares at the end of the third quarter, with the value of their holdings up from $276.86 million at the end of the second quarter. Among the Kite Pharma Inc (NASDAQ:KITE) bulls is Andreas Halvorsen‘s Viking Global, owning a stake of 2.47 million shares.
In other news, Qunar Cayman Islands Ltd (NASDAQ:QUNR) shares are down by over 10% on profit taking, as shares of the company neared a 52-week high (and strong resistance level) in recent days. Given that shares are up by well over 65% year-to-date, it’s possible that investors are rotating into other stocks with better perceived risk/reward opportunities. Qunar Cayman Islands Ltd (NASDAQ:QUNR) is one of the leading Chinese online travel information providers and search engines and has plenty of growth ahead given China’s demographics and growing middle-class. The company counts many smart money hedge fund managers as fans, including Andreas Halvorsen, as well as George Soros of Soros Fund Management, both of which owned stakes in the company on September 30.
On the next page, we examine Coherus and Oxford to get the skinny on their slides.