Why These 5 Stocks Are Taking It On the Chin Today

After a strong Tuesday, the market is back to declining today, with all major U.S stock indexes trading slightly down. Among the stocks driving these tumbles, investors can count Ascena Retail Group Inc (NASDAQ:ASNA), Big 5 Sporting Goods Corporation (NASDAQ:BGFV), Calavo Growers, Inc. (NASDAQ:CVGW), Rovi Corporation (NASDAQ:ROVI), and Monsanto Company (NYSE:MON). Let’s take a look into the news behind said drops, and into what the hedge funds in our database think about the companies in question.

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Let’s start with Ascena Retail Group Inc (NASDAQ:ASNA), trading down by about 5.3% in early afternoon trading. After the market closed on Tuesday, the small-cap company reported quarterly earnings of $0.01, which was $0.02 above the Street’s consensus. However, revenue of $1.84 billion missed estimates by $40 million, despite being up by 42.6% year-over-year. Nonetheless, the sales miss did not seem to be the main driver behind the decline in the stock. Rather, the company’s uninspiring guidance for the third quarter of fiscal year 2016 appears to be the culprit. While management guided for full fiscal year 2016 EPS of $0.75-to-$0.80, above the $0.74 consensus, the forecast of $0.10-to-$0.14 for the current fiscal quarter came in below expectations of $0.19.

Negative news aside, hedge funds in our database seem quite bullish on Ascena Retail Group Inc (NASDAQ:ASNA). Over the fourth quarter, the number of funds among those that we track which were long the stock rose by 13% to 26. Moreover, on February 16, Steve Cohen’s Point72 Asset Management disclosed a massive increase in its exposure to the company, to more than 7.16 million shares from 880,000 shares held on December 31. This stake made it the second-largest hedge fund shareholder in our  system.

Big 5 Sporting Goods Corporation (NASDAQ:BGFV) is also trading down, by almost 10%, even though the company posted an earnings and revenue beat on Tuesday evening. Earnings of $0.22 came in $0.03 ahead of the Street’s consensus, while sales of $275 million, up by 9.9% year-over-year, beat estimates by $1.57 million. So, why is the stock tumbling? Once again, guidance was quite weak. Management said it expects to see comps around the low negative single-digits or low positive single-digits for the first quarter of 2016. In addition, the company envisions earnings somewhere between a net loss of $0.05 per share and EPS of $0.02, well below the Street’s consensus, which stands at around $0.20 per share.

Despite the most recent tumble, shares of Big 5 Sporting Goods Corporation (NASDAQ:BGFV) have gained almost 20% in 2016, making several funds in our database quite happy. Among them, we can count activist Alexander Medina Seaver’s Stadium Capital Management, which disclosed ownership of 2.89 million shares of the company as of the end of the fourth quarter.

On the next page we will take a look into the events behind the declines seen in Calavo Growers, Inc. (NASDAQ:CVGW), Rovi Corporation (NASDAQ:ROVI), and Monsanto Company (NYSE:MON).

Another decliner on Wednesday is Calavo Growers, Inc. (NASDAQ:CVGW), down by about 7.5% after analysts at DA Davidson downgraded the stock to ‘Neutral’ from ‘Buy’. The firm had upgraded the stock to ‘Buy’ from ‘Neutral’ less than two months ago. Among the investment firms bullish on Calavo Growers, Inc. (NASDAQ:CVGW), we see Point72 Asset Management, which declared holding 136,900 shares of the company as of December 31, as well as Ken Grossman and Glen Schneider’s SG Capital Management, which disclosed ownership of 136,065 shares as of the end of the fourth quarter.

Next up is Rovi Corporation (NASDAQ:ROVI), down by more than 10% on robust volume in Wednesday trading. The tumble appears to be due to the news that AT&T Inc. (NYSE:T)’s plans to start offering Web-based DirecTV service options like DirecTV Now and DirecTV Mobile. In response to the dip, JPMorgan analyst Sterling Auty said the stock made for a good investment and maintained an ‘Overweight’ rating on it, suggesting that investors aren’t seeing the bigger picture.

Glenn W. Welling is probably not very happy with the dip, as his fund, Engaged Capital, held 2.25 million shares of Rovi Corporation (NASDAQ:ROVI), valued at more than $37 million on December 31. Something similar could be assumed of the other 17 firms in our database which disclosed long stakes in the company as of the end of the fourth quarter.

Finally, there’s Monsanto Company (NYSE:MON), which has lost more than 7.5% on Wednesday, after management trimmed its guidance for the ongoing quarter and fiscal year. Citing FX headwinds, growing generic competition and lower grower margins, the team revised its fiscal year 2016 EPS guidance to $3.42-to-$4.29, well below the previous guidance of $4.40-to-$5.10. In addition, CEO Hugh Grant said the company is no longer interested in acquiring Syngenta AG (ADR) (NYSE:SYT), given that the company has agreed to sell itself to ChemChina.

Among the funds that are most likely unhappy with the news, investors can count Larry Robbins’ Glenview Capital, which disclosed ownership of 14.07 million shares of Monsanto Company (NYSE:MON), valued at more than $1.38 billion as of December 31. Other prominent investors at the end of 2015 include SPO Advisory Corp, Eminence Capital, Fir Tree, and D E Shaw.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.