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Do Hedge Funds Agree with Mr. Market as these Stocks Fall on Weak Outlook?

The shares of Capstone Turbine Corporation (NASDAQ:CPST) and Dunkin Brands Group Inc (NASDAQ:DNKN) have slid significantly today after both firms had announced weak guidance for the latest quarter and full-year. Insider Monkey’s comprehensive hedge fund data show that hedge funds preferr one of these two stocks more than the other and the sentiment was trending in opposite directions for each of them between April and June.

Dunkin’ Donuts


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Capstone Turbine Corporation (NASDAQ:CPST)’s stock is down sharply at nearly 25% as the firm announced that the strong dollar as well as in the oil and gas market will negatively affect revenue for the firm’s second quarter. Earnings for the quarter are below the management’s expectations, the company announced, as the strong dollar has pushed clients to delay orders and shipments. Jim Crouse, Capstone’s executive vice president of sales and marketing, said that they have about 75 microturbines with a capacity over 13 MW that were supposed to be delivered in this quarter but will now be shipped in the next quarter. Additionally, the company said that its Russian distributor, one of their biggest customers until recently, has not made any significant payments in the quarter  ended September 30. However, Capstone said that it had made moves to remedy the increased cash burn. The company indefinitely indefinitely postponed an upcoming employee merit increase, cut hourly overtime, eliminated temporary workers, converted variable cash compensations to stock grants.

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Capstone Turbine Corporation (NASDAQ:CPST) registered an inflow of capital from hedge funds, with investors we track owning $5.56 million worth of the company’s shares at the end of June, down by 7.11% from the end of March, as the stock decreased in value by 36.82%. According to our data, there were nine hedge funds long on the stock, up by five from the previous quarter. Their holdings, however, amassed just 4.10% of Capstone at the end of June. Thomas E. Claugus‘ GMT Capital owned 5.49 million shares of Capstone, representing a new position. Israel Englander’s Millennium Management also initiated a stake containing 3.12 million shares in the second quarter.

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