Markets opened lower on Friday following disappointing GDP growth stats from the Commerce Department and weak earnings from the energy sector.
Among the major losers today are Seres Therapeutics Inc (NASDAQ:MCRB), Stericycle Inc (NASDAQ:SRCL), GoPro Inc (NASDAQ:GPRO), Western Digital Corp (NASDAQ:WDC) and Expedia Inc (NASDAQ:EXPE). Let’s take a look at the developments that pushed these stocks lower and see how hedge funds tracked by Insider Monkey are positioned towards these companies.
By analyzing the equity portfolios of 760+ top investors, we can see what stocks they are collectively bullish on and use this data to compile a portfolio that can outperform the market. We have determined through this process that the best strategy is to follow the 15 most popular small-cap picks among hedge funds, which have delivered an alpha of around 81 basis points per month in our backtests covering the period between 1999 and 2012 (see more details).
Seres Therapeutics’ Drug Trial Fails to Meet Endpoint
Seres Therapeutics Inc (NASDAQ:MCRB)’s stock has plunged by around 74% after the company said its interim Phase 2 trial results for its colon infection treatment drug, SER-109, failed to achieve primary endpoint. The company said that it continues to gather and analyze the results from the study, and plans to make adjustments to the drug after consultation with the FDA. Seres Therapeutics’ CEO Roger Pomerantz said in a statement that the results from the study were “unexpected”, and the company plans to do a full review and compare them to the data from a prior investigator sponsored Phase 1b. Just nine funds from our database were long Seres Therapeutics Inc (NASDAQ:MCRB) at the end of the first quarter.
Stericycle Misses Q2 Revenue Estimates, Lowers Guidance
Stericycle Inc (NASDAQ:SRCL)’s stock has lost some 17% so far today after the company missed revenue estimates for the second quarter. The Illinois-based company engaged in collection and disposal of hazardous waste material earned $1.18 per share, in-line with the analyst estimates. but revenue of $891.6 was lower than the consensus estimate of $912.79 million. In addition, Stericycle lowered its full-year EPS guidance to the range of $4.68 to $4.75 from the previous forecast of $4.90 to $5.05. Barry Rosenstein’s JANA Partners owns more than 2.42 million shares of Stericycle Inc (NASDAQ:SRCL) as of the end of the first quarter. Overall, 24 hedge funds tracked by us were bullish on the company.
On the next page, we will discuss why shares of GoPro, Western Digital and Expedia are losing ground today.