Oil continues to tumble on Thursday, driven by a strengthening dollar and record high stockpiles in the U.S, pushing the commodity back below the $40 a barrel threshold. Along with oil, gold is also down, which has conspired to push down the stock markets. Among the most relevant decliners, investors can count Portola Pharmaceuticals Inc (NASDAQ:PTLA), Paypal Holdings Inc (NASDAQ:PYPL), Antero Midstream Partners LP (NYSE:AM), Lannett Company, Inc. (NYSE:LCI), and California Resources Corp (NYSE:CRC). Let’s take a look into the events driving these drops, and see what the hedge funds in our database think about these companies.
Our research determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).
Let’s start with Portola Pharmaceuticals Inc (NASDAQ:PTLA), which is down by more than 25% this morning after the company revealed that its blood-clot treatment, betrixaban, showed no statistical difference in treating the condition versus the current standard of care, Lovenox. Before the phase 3 trial results were released, trading of the shares was halted at 6:55 am this morning. Taking into account today’s 25% tumble, the stock has lost more than 57% since the beginning of the year.
Among the funds that we track, 24 were long Portola Pharmaceuticals Inc (NASDAQ:PTLA) at the end of the fourth quarter, with their aggregate stakes accounting for almost 20% of the company’s total shares. The largest position was that of Israel Englander’s Millennium Management, which disclosed ownership of 1.64 million shares, valued at $84.78 million on December 31.
Next up is Paypal Holdings Inc (NASDAQ:PYPL), which is trading down by roughly 4.8% after research firm Sterne Agee initiated coverage on the stock with a ‘Neutral’ rating and $45 price target, while Piper Jaffray’s Gene Munster reiterated an ‘Underweight’ rating and $33 price target on it. The latter cited a Re/code report issued Wednesday which said that Apple Pay will be expanding to mobile sites before the holiday shopping season, allowing shoppers to complete purchases simply by pressing their thumbs onto the fingerprint-reading iPhone and iPad screens. This is worrying because according to Munster’s calculations, at least 20% of Paypal’s total payments volume last year was conducted on Apple mobile devices. For its part, Sterne Agee pointed out the potential risks to the company’s leading position in the eCommerce arena over the long-term.
Future challenges aside, Paypal Holdings Inc (NASDAQ:PYPL) is quite popular among institutional investors. 84 funds in our database held long positions in the stock by the end of the fourth quarter, holding approximately 12.4% of the company’s outstanding shares. Among the funds we keep track of, Carl Icahn’s Icahn Capital LP owned the largest stake, comprising 46.27 million shares worth more than $1.6 billion on December 31.
Three more of the day’s biggest losers are discussed on the next page.