Morning Market Losers: MBIA Inc. (MBI), Peabody Energy Corporation (BTU) & Vale SA (ADR) (VAL)

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There are a few stocks which traded significantly lower today, a couple of which just couldn’t seem to catch a break, although one of them has begun to rebound in afternoon trading. These major morning market losers are MBIA Inc. (NYSE:MBI), Peabody Energy Corporation (NYSE:BTUand Vale SA (ADR) (NYSE:VAL). MBIA Inc. (NYSE:MBIA)’s stock had already dropped by around 26% on Monday and that trend continued this morning, with the stock having dropped another 9% at point this morning. However shares have since rallied heartily and are now actually up slightly for the day, by nearly 1%. MBIA is a company which has exposure to the Puerto Rican Islands, and due to this, was getting beat up in the US market following the news of financial crisis taking place in the US Commonwealth. Peabody Energy Corporation (NYSE:BTU) has experienced the opposite effect of sorts, having soared by more than 10% on Monday, but giving back nearly all of those gains today, with shares trading down by over 12%. The stock jumped yesterday due to the Supreme Court’s ruling that the Environmental Protection Agency (EPA) must consider the financial impact to companies before imposing regulations over public health. The gains by Peabody Energy have reversed today as analysts’ believe the ruling might not help the coal industry all that much. In the last year, Vale SA (ADR) (NYSE:VAL) has dropped more than 55%, and by more than 25% since May alone. That hasn’t stopped it from dropping another 4% so far today however, continuing the general trend among metal and mining sector stocks. So, were hedge funds expecting these developments and braced themselves accordingly? Let’s take a look at the data and find out.


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MBIA Inc. (NYSE:MBIA)’s stock had dipped by more than 30% so far this week mainly due to the hostile financial environment in the Puerto Rican Islands, as mentioned. Hedge fund were rather bearish on this stock entering the quarter, with the number of them having holdings in it decreasing to 29 at the end of the first quarter, from 37 at the end of the fourth quarter. There was also a drop of 22% in the aggregate capital invested, down to $237.96 million, while shares were only down slightly during that period, so there was clear bearish sentiment on the stock. Looking at the hedgies followed by Insider Monkey, Royce & Associates, managed by Chuck Royce, holds the largest position in MBIA Inc. (NYSE:MBI), with around 5.0 million shares worth $47.3 million and comprising 0.2% of its 13F portfolio. Intriguingly, Mark T. Gallogly‘s Centerbridge Partners said goodbye to the largest position of all the hedgies tracked by Insider Monkey, totaling an estimated $15.6 million in stock at the end of the first quarter. In terms of insider activity, CEO of MBIA, Joseph Brown purchased around 76,000 shares on June 19. Overall, the hedge funds were right to be bearish on this stock, though the large purchase by the company’s CEO is noteworthy.

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