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NuVasive, Basic Energy Services, Mariott Vacations Worldwide: Why Did These Three Stocks Get Slammed Today?

The stock market is up sharply today, yet there were several stocks with disappointing performance. Three stocks that disappointed investors today with their sharp declines included Marriott Vacations Worldwide Corp (NYSE:VAC), NuVasive, Inc. (NASDAQ:NUVA), and Basic Energy Services, Inc (NYSE:BAS). Besides closely looking at the varied reasons contributing to the downswing of these stocks we will also examine which investors bore the largest brunt of these declines.


In its financial results for the third quarter ending on September 11, Marriott Vacations Worldwide Corp (NYSE:VAC) delivered an EPS of $0.82, compared to the analysts’ estimate of $0.87. Revenue of $407.1 million also came in $24.73 million short of expectations. Even though the $2.42 billion global pure-play vacation ownership company raised its full year EPS guidance range to between $3.33 and $3.52 from $3.29 to $3.48, it wasn’t enough to assuage the investors leading to a slump of 15% in the company’s stock price today. The main catalyst for this was perhaps the announcement of Marriott Vacations Worldwide Corp (NYSE:VAC)’s management that it expects the full year contract sales to be flat or post a 2% increase. This was in sharp contrast to the 5% to 8% rise in sales previously expected by the company.

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Among over 700 hedge funds that we track at Insider Monkey the interest in Marriott Vacations Worldwide Corp (NYSE:VAC) declined during the second quarter as a total of 14 funds had investments worth $25.58 million in the company, representing 0.9% of Marriott’s total market cap, as compared to 17 firms with $42.21 million held in shares at the end of March. David Shaw‘s D E Shaw headed this list after a 24% surge in its holding during the second trimester.

We pay attention to hedge funds’ moves because our research has shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular small-cap stock picks in real time since the end of August 2012. These stocks have returned 102% since then and outperformed the S&P 500 Index by around 53 percentage points (see the details here). That’s why we believe it is important to pay attention to hedge fund sentiment; we also don’t like paying huge fees.

Shares of the $2.48 billion medical device company for spine related treatments, NuVasive, Inc. (NASDAQ:NUVA), fell by almost 8% in the early trading, but gained back some ground and were down by about 3% in mid afternoon. The development didn’t come on the back of nay significant news. Conaccord Genuity recently upgraded the company to a ‘Buy’ rating from ‘Hold’ and increased its price target to $58 from $52. NuVasice will release its third quarter financial results at the end of this month.

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Israel Englander‘s Millennium Managed topped our list of NuVasive, Inc. (NASDAQ:NUVA)’s investors as it held over 2 million shares valued at $95.20 million at the end of June.

On the next page we have the energy company, which faced yet another bad day on the market.

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