The U.S stock indexes hit record highs on Monday, helped by Bank of America Corp (NYSE:BAC)’s better than expected financial results and some M&A activity in the tech sector. However, not every stock has been bouyed by the strong push in the last couple weeks, as they have not only moved in the opposite direction, but also fallen to their 52-week lows.
In this article we’ll take a look at five such stocks, TG Therapeutics Inc (NASDAQ:TGTX), NantHealth Inc (NASDAQ:NH), xG Technology Inc (NASDAQ:XGTI), Amedica Corporation (NASDAQ:AMDA), and DryShips Inc. (NASDAQ:DRYS), and study their performance. We’ll also look into how the hedge funds in our database have been trading these companies of late and whether or not they have seen the declines coming.
Through extensive research, we determined that imitating some of the picks of hedge funds and other institutional investors can help generate market-beating returns over the long run. The key is to focus on the small-cap picks of these investors, since they are usually less followed by the broader market and are less price-efficient. Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see more details here).
Let’s start with TG Therapeutics Inc (NASDAQ:TGTX), which hit a low of $5.61 on Monday, on what seemed like no particular news. The shares recuperated toward the end of the day, closing below $6.00, but slid by another 5.22% on Tuesday, to close back near that yearly low at $5.63. The stock has been extremely volatile this year, and has lost more than 52% so far.
Despite the feebleness, a few funds in our database are still betting on TG Therapeutics Inc (NASDAQ:TGTX). As of the end of the first quarter, nine funds among those we track were long the stock, holding almost 25% of the company’s float. Among them was Peter Kolchinsky’s RA Capital Management, which boosted its exposure to the small-cap biotech by 62% over the first quarter to more than 4.5 million shares.
Next up is NantHealth Inc (NASDAQ:NH), which traded at 52-week lows on Monday and Tuesday, sliding to a price of $11.28, which also pushed its year-to-date loss to 38.46%. Again, no particular news seem to be driving the decline in the small-cap, which started trading on the Nasdaq exchange on June 3, and has since received ‘Buy’ (or equivalent) ratings from Canaccord Genuity, First Analysis, and Cowen and Company. Given its recent entry into the stock market, there are no known shareholders of NantHealth Inc (NASDAQ:NH) in our database at this time.
We’ll check out three other Nasdaq stocks that have hit their 52-week lows this week on the next page.
Similar to NantHealth, xG Technology Inc (NASDAQ:XGTI) also hit a 52-week low on Monday, and then again on Tuesday, trading as low as $0.44 in morning trading. Year-to-date losses for the nano-cap amount to more than 80%. Last month, the company announced a 1-for-12 reverse stock split, while earlier this month it priced an offering of 7.3 million units of common stock at $0.685 per unit, which caused shares to plummet by over 43%. Each unit in the offering comprises one share of common stock and 1.25 of a warrant to purchase a share of common stock at an exercise price of $0.685 per share.
Despite being a nano-cap, xG Technology Inc (NASDAQ:XGTI) counts the support of a few institutional investors, including Ken Griffin’s Citadel Advisors, which declared holding 17,223 shares of the company as of March 31.
Yet another stock that hit 52-week lows on both Monday and Tuesday was Amedica Corporation (NASDAQ:AMDA), which traded as low as $0.74 per share on Tuesday. Earlier this month, the nano-cap plummeted after announcing that it had priced a public equity offering of Class A Units and Class B Units at $1.00 and $1,000.00, respectively.
As of the end of the first quarter, three funds in our database were long Amedica Corporation (NASDAQ:AMDA), including Jim Simons’ Renaissance Technologies, which owned 333,309 shares.
Finally, there’s DryShips Inc. (NASDAQ:DRYS), which has lost more than 90% of its value this year, hitting 52-week lows on Monday and Tuesday, and trading as low as $0.40 per share. Despite being a troubled company operating in a conflicted industry, DryShips was in the equity portfolios of four of the hedge funds in our system at the end of the first quarter. Among them were James Dondero’s Highland Capital Management, owning 380,958 shares, and, Mr. Simons’ quant fund RenTech, with 320,262 shares.
Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.