The Nasdaq Composite index has had a rather volatile week after a severe downturn on Friday, but has ultimately managed to gain more than 0.9% so far this week. Amidst such volatility, several major stocks have hit 52-week lows this week, something that had been a rarity during the two-month bull run coming out of the Brexit dip.
Among the Nasdaq stocks hitting new yearly lows this week were Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC), First Solar, Inc. (NASDAQ:FSLR), Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH), 21Vianet Group Inc (NASDAQ:VNET) and Whole Foods Market, Inc. (NASDAQ:WFM). Let’s take a look at what has driven these stocks to such depressed valuations, and see how the hedge funds in our database have been trading these companies lately.
At Insider Monkey, we track around 750 hedge funds and other 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).
Ericsson Touches Ground After Licensing Deal
Shares of Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) hit a 52-week low of $6.69 just before 11:00 am on Wednesday, after it announced that it was joining forces with some other key telecom patent holders to create a company that holds all of those patents and helps ease patenting. The new company, called Avanci, will incorporate patents from Ericsson, QUALCOMM, Inc. (NASDAQ:QCOM), ZTE, Royal KPN and InterDigital Inc. The companies plan to share the revenue derived from licensing deals. As of the end of the second quarter of 2016, Telefonaktiebolaget LM Ericsson (NASDAQ:ERIC) counted 12 hedge funds in our database long its stock, including Ken Griffin’s Citadel Advisors, with 1.04 million shares.
First Solar Sinks As Renewable Energy Plan Disappoints
Just before 10:00 am Wednesday, First Solar, Inc. (NASDAQ:FSLR) hit a 52-week low of $34.50, after the Desert Renewable Energy Conservation Plan, which had been in development for eight years, was met with disappointment from solar developers, who believe that it overly favors land conservation and won’t be nearly enough to meet the government’s climate change goals. 30 funds that we track held long positions in First Solar, Inc. (NASDAQ:FSLR) as of June 30. Among them was David Harding’s Winton Capital Management with 263,118 shares.
We’ll check out three other stocks that have hit yearly lows recently on the next page.