Markets are strong today, ahead of an important two-day policy meeting of the US Fed. Markets expect the interest rates to remain unchanged and the official announcement should be made any minute now.
In today’s market, there are several stocks which showed a deep tumble in their market price. Among them are CareDx Inc (NASDAQ:CDNA), Netflix Inc. (NASDAQ:NFLX), Banc of California Inc. (NYSE:BANC), Skechers USA Inc (NYSE:SKX) and Pacira Pharmaceuticals Inc (NASDAQ:PCRX). In this article, we will take a look at the reasons behind these price declines. In addition, we are going to assess the hedge fund sentiment towards these stocks.
Hedge fund sentiment is an important metric for assessing long-term profitability. At Insider Monkey, we track over 700 hedge funds, whose quarterly 13F filings we analyze to determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see more details here).
CareDx Inc (NASDAQ:CDNA) stock has dipped by around 12% so far today after the company announced the pricing of its common stock offering. The company will offer 2.25 million shares at a price of $4.00 per share. Among the funds we track, three funds held $1.4 million worth of CareDx’s stock in aggregate at the end of June, having amassed 2.50% of its outstanding stock, compared to three investors that held $2.237 million worth of shares a quarter earlier.
Netflix Inc. (NASDAQ:NFLX) stock is trading some 4.50% lower amid a report released by M Science that claimed that the company is expected to miss its third-quarter subscriber targets due to high churn rate. The number of funds from our database long Netflix amounted to 54 at the end of June, while the total value of their holdings stood at $3.73 billion, down from $6.66 billion held by 64 funds at the end of the previous quarter.
Banc of California (NYSE:BANC) has sunk by 4.59% following news about the resignation of its CFO that emerged yesterday. CFO James McKinney stepped down for personal reasons after occupying the position for less than a year. Among the funds we track, 17 funds held $97 million worth of Banc of California’s stock in aggregate at the end of June, having amassed 12.20% of its outstanding stock, compared to 40 investors that held $90 million worth of shares at the end of March.
Skechers USA Inc (NYSE:SKX)’s stock is over 9% in the red after analysts at Morgan Stanley downgraded the stock to ‘Equal Weight’ from ‘Overweight’ and slashed the price target to $25 f$41 to $25. The analyst report suggested that the company will face low demand in the coming months. The number of funds from our database long Skechers USA declined to 27 from 32 during the second quarter, while the aggregate value of their positions fell to $424 million from $477 million and represented 9% of its outstanding stock.
Pacira Pharmaceuticals Inc (NASDAQ:PCRX)’s stock has lost over 10% since the opening bell. Earlier today, Wedbush reaffirmed its ‘Outperform’ rating and $109 price target on Pacira Pharmaceuticals. In other news, also today the company has announced the launch of its EXPAREL® (bupivacaine liposome injectable suspension) to the oral surgeon community. The product is a local analgesic that can be used in postsurgical pain control. Among the funds we track, 26 funds held $253 million worth of Pacira Pharmaceuticals’s stock in aggregate at the end of June, having amassed 20.20% of its outstanding stock, compared to 22 investors that owned $548 million worth of shares a quarter earlier.