With the VIX index above 20 as investors remain concerned about the potential impending Federal Reserve interest rate hike next week, shares of Vince Holding Corp (NYSE:VNCE), Puma Biotechnology Inc (NYSE:PBYI), Seadrill Partners LLC (NYSE:SDLP), and Facebook Inc (NASDAQ:FB) are losing ground for various reasons. In the following article, we take a closer look at why investors are selling.
In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8000 funds in operation at present, Hedge fund experts at Insider Monkey look at the aristocrats of this group, around 730 funds. Contrary to popular belief Insider Monkey’s research revealed that hedge funds underperformed in recent years because of their short positions as well as the huge fees that they charge. Hedge funds managed to outperform the market on the long side of their portfolio. In fact, the 15 most popular small-cap stocks among hedge funds returned 102% since the end of August 2012 and beat the S&P 500 Index by 53 percentage points (see the details here).
Vince Holding Corp (NYSE:VNCE) shares are off by more than 16% after the company reported its latest earnings results. Although the contemporary fashion brand company’s third-quarter EPS of $0.13 exceeded analyst estimates by $0.06 per share and its revenue of $80.86 million beat expectations by $5.91 million, the guidance is weak, with management expecting fiscal 2015 adjusted diluted earnings per share of $0.17 – $0.21 on total net sales in the range of $285 million to $290 million. That’s off from the previous guidance of $0.31 – $0.37 on revenue of $285 – $295 million.
CEO Brendan Hoffman said:
“Our third quarter results were largely in line with our expectations. We saw continued challenges in the wholesale channel and less traffic in our direct-to-consumer business, along with deeper discounts, which is consistent with what we are seeing in the overall retail environment. Looking ahead, I am excited to be leading the Vince brand and I look forward to working with our founders, Rea and Christopher, as well as the rest of the team to recapture the brand DNA and position the Company for long term sales and profitability growth.”
A total of 18 funds from our database owned 15.1% of Vince Holding Corp (NYSE:VNCE)’s float at the end of the third quarter.
In other news, Puma Biotechnology Inc (NYSE:PBYI) shares are off considerably as investors continue to sell the stock after the biotech company reported interim results from a phase 2 breast cancer study concerning the company’s lead product candidate, PB272, yesterday. Although patients receiving PB272 showed a 33% reduction in the probability of invasive disease recurrence versus placebo, the reduction was evidently not enough to please market participants, as shares of Puma Biotechnology Inc (NYSE:PBYI) lost 19% in afternoon trading. According to our data, 18 funds were long almost 1/3 of Puma’s float at the end of September.
On the next page, we examine why investors are selling Seadrill Partners LLC and Facebook.