Be Wary of These Five Tanking Stocks Today, Office Depot Among Them

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Although all three indexes are well in the green and the Dow Jones is above 18,000 with this quarter’s earnings season being relatively quiet and the results less dire than had been predicted, the shares of five stocks are taking a beating today. Owens & Minor, Inc. (NYSE:OMI), Repros Therapeutics Inc (NASDAQ:RPRX), PTC Therapeutics, Inc. (NASDAQ:PTCT), Office Depot Inc (NASDAQ:ODP), and Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) are all shedding market cap at an inflated rate today. Let’s find out why traders are selling these stocks and see how hedge funds are positioned in each of them.

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 the details here).

Owens & Minor Loses a Big Account

Traders have sold Owens & Minor, Inc. (NYSE:OMI) off to the tune of 9% after the company announced that one of its major customers will not renew a distribution agreement with it. The customer is a national healthcare-provider and generated $525 million in revenue for Owens & Minor in 2015. The transitioning out of the customer will begin in late 2016. Although Owens & Minor affirmed its financial outlook for 2016, consisting of adjusted earnings of $2.00-to-$2.05 per share, the impact of the transition will have a large impact in 2017, barring any major intervening moves. 14 savvy funds that we track owned 6.3% of Owens & Minor, Inc. (NYSE:OMI) at the end of December.

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Technical Selling Detected at Repros

Repros Therapeutics Inc (NASDAQ:RPRX) is off by 8.6% on no fundamental news. Shares of the company have surged substantially since the middle of April and some of today’s selling could be due to profit-taking. The nano-cap surged in mid-April due to the announcement of successful data from a Phase 2b trial of the company’s lead drug candidate Proellex, which showed the ability to lower menstrual bleeding in women with uterine fibroids. Repros Therapeutics Inc (NASDAQ:RPRX) shares are also moving closer to their 200 day simple moving average, which might offer some resistance. Ten funds in our database of 786 elite investors owned slightly over 12% of the company’s float at the end of 2015.

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On the next page we examine why PTC Therapeutics Inc, Office Depot Inc, and Ironwood Pharmaceuticals Inc. are also among the day’s big losers.

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