Why Are These Stocks Deep in Red Today?

The three major indexes are slightly in the green today after Federal Reserve Chairwoman Janet Yellen said that the institution would take a cautious approach to hiking rates.

Among the stocks deep in the red today are Medgenics Inc (NYSEMKT:MDGN), SCYNEXIS Inc (NASDAQ:SCYX), Canadian Pacific Railway Limited (USA) (NYSE:CP), Werner Enterprises, Inc. (NASDAQ:WERN), and Immunomedics, Inc. (NASDAQ:IMMU). Let’s find out why traders are selling and see what elite funds think of each stock.

At Insider Monkey, we track around 770 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details here).

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Medgenics and SCYNEXIS Down on Offering Pricing

Medgenics Inc (NYSEMKT:MDGN) shares are 13% lower today after the company priced its previously announced offering of 3.64 million shares of common stock at $5.50 per share. The company has granted underwriters a 30 day option to buy an additional 15% of shares of common stock offered to the public at the same price. Medgenics plans to use the net proceeds for product development activities, licensing and research collaborations and other general corporate purposes. Six funds from our database amassed $34.11 million worth of Medgenics Inc (NYSEMKT:MDGN)’s stock at the end of March, which accounted for 23.50% of the float on March 31, versus nine funds and $43.66 million, respectively, on December 31.

SCYNEXIS Inc (NASDAQ:SCYX) is 14% in the red after the company priced its public offering of 9.375 million shares of common stock and warrants to purchase 4,218,750 shares at $2.40 per share. The warrants have a five year term, are immediately exercisable upon issuance, and have an exercise price of $3 per share. SCYNEXIS has granted underwriters a 30-day option to buy another 1,406,250 shares of common stock and warrants to purchase up to 632,812 shares of common stock at the public offering price minus underwriting discounts and commissions. The number of funds from our database with holdings in SCYNEXIS Inc (NASDAQ:SCYX) fell by one quarter-over-quarter to eight at the end of March.

On the next page, we examine Canadian Pacific Railway Limited, Werner Enterprises, and Immunomedics.