Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Why Are These Five Stocks Tumbling on Tuesday?

Page 1 of 2

The market spiked Tuesday, with all major U.S. indexes trading up by more than 1.5%. However, several stocks were registering steep declines, with top losers including Sunedison Inc (NYSE:SUNE), Ocwen Financial Corp (NYSE:OCN), Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Pepco Holdings, Inc. (NYSE:POM) and Marathon Oil Corporation (NYSE:MRO). Let’s take a look into the events behind the declines of these stocks, as well as see what the hedge funds in our database think about these companies.

The smart money sentiment is an important metric that can be used to assess the long-term profitability of a stock. While there are thousands of stocks trading on the market, taking a look at what hedge funds think about certain companies can narrow down the search significantly. At Insider Monkey, we track more than 700 hedge funds, whose 13F filings we analyze as part of our small-cap strategy. Our research has shown that imitating a portfolio that includes the 15 most popular small-cap stocks among hedge funds can outperform the market by as much as 95 basis points per month on average (see more details here).

Back to the stocks that interest us, let’s start with Sunedison Inc (NYSE:SUNE), which is trading down by more than 20% on Tuesday. Apparently, three developments are driving the decline in the stock price. The company disclosed that it was undergoing an internal inquiry that began in late 2015, “based on allegations made by former executives,” in relation to the accuracy of its financial position. This led the company to say that its financial results for 2015 will be filed 15 calendar days after their due date. In addition to the news reported by the company, Sunedison Inc (NYSE:SUNE)’s stock was downgraded by Oppenheimer. Earlier today, analyst Colin Rusch has demoted the stock to ‘Perform’ from ‘Outperform’ due to the delay in the earnings release and liquidity issues.

Follow Sunedison Inc. (NYSE:SUNEQ)
Trade (NYSE:SUNEQ) Now!

While most investors might negatively interpret the decline registered by Sunedison in the last several months, bulls are raging, taking advantage of the depressed stock prices to build up their positions. This is the case of David Einhorn’s Greenlight Capital. The fund declared holding 18.6 million shares as of the end of the fourth quarter of 2015 and in January it disclosed a marked increase in its stake to 27.15 million shares.

Another big decliner on Tuesday is Ocwen Financial Corp (NYSE:OCN), whose stock has slid by 38, extending the losses of 38% registered on Monday, after it had reported a fourth-quarter net loss of $1.79 per share, widely missing estimates of a loss of $0.29 per share. Revenue of $362.46 million, down 26.5% year-over-year, also came in lower than expected. In addition, on Monday, the company disclosed another SEC probe into its operations, which have been subject of many other investigations in the recent past.

Follow Ocwen Financial Corp (NYSE:OCN)
Trade (NYSE:OCN) Now!

One of the investors that is probably not very happy about Ocwen’s performance is Michael Blitzer. His fund, Kingstown Capital Management, disclosed ownership of 12.5 million shares of Ocwen Financial Corp (NYSE:OCN), valued at more than $87 million as of December 31.

On the next page, we will take a look at the events driving the declines in Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Pepco Holdings, Inc. (NYSE:POM) and Marathon Oil Corporation (NYSE:MRO).

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!