Look Out Below! What’s the Deal With These 5 Falling Stocks?

The broader indexes are well in the green today, as new home sales surged by 12.4% in July to hit their 9-year high, outpacing supply in the process.

Five equities aren’t enjoying the same banner day as the broader market however, as they are deep in the red in early afternoon trading. We’ll see why traders are shinning Sophiris Bio Inc (NASDAQ:SPHS), Zoe’s Kitchen Inc (NYSE:ZOES), Premier Inc (NASDAQ:PINC), Tuniu Corp (NASDAQ:TOUR), and Kirkland’s, Inc. (NASDAQ:KIRK) today in this article, and use the latest SEC filings to see how hedge funds have been trading each stock.

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).

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Sophiris Falls Sharply on Secondary Offering

Sophiris Bio Inc (NASDAQ:SPHS) is 32% in the red due to a lower-than-expected secondary offering in which the biopharmaceutical company issued 6.5 million common shares and related warrants to buy another 4.875 million shares, for a combined price of $4 per share and related warrant. The warrants have an exercise price of $4 per share, and the gross proceeds to Sophiris are expected to amount to around $26 million. Of the 749 13F-filing hedge funds that Insider Monkey tracks, just three funds were long Sophiris Bio Inc (NASDAQ:SPHS) at the end of June, owning 4.90% of its float.

Zoe’s Kitchen Down on Earnings

Zoe’s Kitchen Inc (NYSE:ZOES) shares have fallen by almost one-fifth in morning trading after the restaurant chain provided underwhelming guidance. Although its second quarter earnings of $0.06 per share were in-line with estimates and its revenue of $66.3 million only narrowly missed the consensus target, by $0.98 million, the restaurant chain’s guidance was a relative disappointment. For the full year, management expects sales of $277 million-to-$280 million, down from the previous guidance range of $277 million-to-$281 million, and falling below the consensus of $280.5 million on the top-end. Management is on track to open 35-to-36 restaurants in 2016 and believes Zoe’s has the potential to operate over 1,600 units in the U.S. The number of hedge funds in our database with holdings in Zoe’s Kitchen Inc (NYSE:ZOES) fell by four quarter-over-quarter to nine at the end of June.

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On the next page, we’ll find out why Premier Inc, Tuniu Corp, and Kirkland’s are each deep in the red today.


Premier Declines After EPS Falls Short

Premier Inc (NASDAQ:PINC) earned $0.36 per share on revenue of $301.42 million for its fiscal year 2016 fourth quarter, missing EPS estimates by $0.02 per share, but beating the top-line consensus mark by $1.1 million. Although revenue rose by 13.1% year-over-year and beat estimates, traders mainly focused on the bottom-line miss and underwhelming guidance, with management expecting adjusted EPS for its 2017 fiscal year of $1.71-to-$1.82 (versus fiscal year 2016 EPS of $1.61) and adjusted EBITDA of $475 million-to-$500 million. Premier shares are off by 8% in morning trading as a result. 14 funds that we track were long Premier Inc (NASDAQ:PINC) at the end of June.

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Tuniu Dissapoints

Tuniu Corp (NASDAQ:TOUR) missed both the top- and bottom-line estimates of analysts with its second quarter results, declaring a loss of $0.90 per share on sales of $355.5 million. Although revenue rose by 55.6% year-over-year (as total travel GMV increased by 94.3% year-over-year), analysts were expecting $0.27 more in earnings per share and $19.49 million more in sales. Revenue growth will likely be slower for the third quarter, as management expects sales of RMB3.88 billion ($584.17 million) to RMB4.03 billion ($606.75 million), which represents 30%-to-35% growth year-over-year. Shares of the company are off by 7% today. Four funds in our system were long Tuniu at the end of the second quarter, up from three quarter-over-quarter.

Kirkland’s Misses the Mark

Kirkland’s, Inc. (NASDAQ:KIRK) reported a disappointing second quarter, with a loss of $0.22 per share and revenue of $123.02 million, missing the consensus marks by $0.01 per share and $2.52 million respectively. Revenue missed in part due to a 4.3% drop in comparable-store sales, while profits missed in part due to a 250-basis-point decrease in gross margin. For the full year, management expects diluted earnings of between $0.70 and $0.80 per share. Jim Simons‘ Renaissance Technologies raised its stake in Kirkland’s, Inc. (NASDAQ:KIRK) by 64% in the second quarter to over 481,000 shares.

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Disclosure: None