Here’s Why TASER International, Heron Therapeutics and Three Other Stocks Are Trading Lower on Monday

The markets have opened the fourth quarter on a negative note. While there are uncertainties on account of upcoming presidential election and deteriorating financial market health in Germany, the US stock market was supported by upbeat manufacturing index, which grew to 51.5 in September from 49.4 in August.

Apart from macro news, the markets are also affected by events surrounding individual companies. Among the stocks losing ground today are TASER International Inc. (NASDAQ:TASR), Heron Therapeutics Inc. (NASDAQ:HRTX), SeaDrill Limited (NYSE:SDRL), Merrimack Pharmaceuticals Inc. (NASDAQ:MACK), and Teradata Corporation (NYSE:TDC). In this article, we are going to take a closer look at the news that sent these stocks lower and will see what the smart money investors from our database think about them.

The smart money sentiment is an important metric that can be used to assess the long-term profitability of a stock. While there are thousands of stocks trading daily on the market, taking a look at what hedge funds think about certain companies can narrow down the search significantly. At Insider Monkey, we track more than 740 hedge funds, whose 13F filings we analyze as part of our small-cap strategy. Our research has shown that imitating a portfolio that includes the 15 most popular small-cap stocks among hedge funds can outperform the market by as much as 95 basis points per month on average (see more details here).

TASER International Inc. (NASDAQ:TASR) stock has plunged more than 13% on news that the company lost a potential contract from the New York Police Department related to body cameras, which is worth worth $6.4 million. According to NY Daily News, the contract has been awarded to Vievu, a Seattle based company, which will now supply more than 1,000 cameras to the police force. TASER was considered a front runner for the lucrative contract. Among the funds we track, 10 funds held $54 million worth of TASER International’s stock in aggregate at the end of June, having amassed 4.20% of its outstanding stock, compared to 11 investors that held $44 million worth of shares a quarter earlier.

Heron Therapeutics Inc. (NASDAQ:HRTX)’s shares are nearly 8% in the red after the company announced the departure of its three key executives in a brief released on September 30. The company has accepted the resignations of Neil Clendeninn, chief medical officer of the company and CFO Bridan Drazba. The resignation of Drazba will be effective from March 31, 2017. The number of funds from database long Heron Therapeutics declined to 10 from 15  during the second quarter, but the total value of their holdings advanced to $327 million from $314 million and represented 49.40% of its outstanding stock.

SeaDrill Limited (NYSE:SDRL) has dipped by more than 6% so far today, erasing some of the gains made in the past trading session. The stock had seen a steep uptick following the news of OPEC deal for limiting crude production to 32.5 million barrels a day. The deal is like to provide a floor to continuously falling crude oil prices. A total of 17 funds from our database have positions in SeaDrill Limited as of the end of June, compared to 22 funds a quarter earlier.

Merrimack Pharmaceuticals Inc. (NASDAQ:MACK)’s stock has declined by 5% following news of mass layoffs and the resignation of its CEO. The company announced that it hasd more or less completed the task of cutting 22% of its workforce. Its CEO and President Robert Mulroy stepped down with immediate effect and board Chairman Gary Crocker has been appointed as interim CEO. The company is looking to cut its operating costs by $200 million over the next two years and expects to incur a one-time charge of $4.5 million to $5.0 million. The number of funds tracked by us long Merrimack Pharmaceuticals Inc. (NASDAQ:MACK) declined by two to 11 during the second quarter.

Teradata Corporation (NYSE:TDC) stock has plunged following a rating downgrade from UBS. Analyst Brent Thill  downgraded the stock to ‘Sell’ from ‘Neutral’ and reduced the price target to $27 from $29, citing the stock’s year-to-date outperformance among reasons for the downgrade. At the end of June, 26 funds followed by our team held about $775 million worth of Teradata stock, compared to 23 funds with $768 million worth of stock a quarter earlier.

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