Ahead of the Fed announcement on interest rates this afternoon, U.S stocks are mostly down, driven by large losses in tech stocks, which are reacting to disappointing results from Apple Inc. (NASDAQ:AAPL) and Twitter Inc (NYSE:TWTR). Among the day’s other big decliners are Qiwi PLC (NASDAQ:QIWI), Robert Half International Inc. (NYSE:RHI), Celator Pharmaceuticals Inc (NASDAQ:CPXX), Encana Corporation (USA) (NYSE:ECA), and ArcelorMittal SA (ADR) (NYSE:MT). Let’s take a look into the events driving the declines in these particular stocks today and see what the hedge funds in our database think about these companies.
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Qiwi Down on Regulatory Fears
Let’s start with Qiwi PLC (NASDAQ:QIWI), a small-cap provider of payment services in Russia and the Commonwealth of Independent States (CIS), which is down by more than 13.5% on Wednesday. While information about the company and the stock’s decline does not abound, the Russian portal of Investing.com has recently reported that the Federal Financial Monitoring Service, the Bank of Russia, the Ministry of Finance, and several large banks are discussing measures to increase the safety of electronic payments, especially as it pertains to virtual wallets. The entities are particularly worried about anonymous electronic wallets, even though anonymous electronic transactions have been capped by recent laws. As one of the two largest payment processing companies in Russia, Qiwi will likely feel the impact of increased regulation, which could lead to a surge in the proportion of cash payments.
As of the end of the fourth quarter of 2015, Qiwi PLC (NASDAQ:QIWI) was in seven portfolios among the hedge funds in our database. Their combined stakes accounted for more than 11% of the company’s float on December 31.
Downgrade Drags Down Robert Half
Next up is Robert Half International Inc. (NYSE:RHI), which has lost 13.4% since the bell rang this morning. On Tuesday afternoon, the company reported first quarter EPS of $0.64 on revenue of $1.3 billion, both of which were in-line with the Street’s expectations. However, higher SG&A expenses, lower gross margins, and an analyst downgrade have conspired to push the stock down regardless. On the latter point, after taking a look into the firm’s latest earnings report, Avondale Partners demoted the stock’s rating to ‘Market Perform’ from ‘Market Outperform’.
Robert Half International Inc. (NYSE:RHI) is considerably more popular than Qiwi among hedge funds as of December 31. 28 firms in our database were long the stock, including Cliff Asness’ AQR Capital Management, which held 1.58 million shares of the consulting services provider.
The performance of three other decliners is assessed on the following page.
Market Sentiment Turning Against Celator
Shares of Celator Pharmaceuticals Inc (NASDAQ:CPXX) are down by roughly 6.9% this afternoon, continuing with the steady decline started on Tuesday. The stock gained 1.14% in Monday trading, after the company issued a report assuring that patients treated in a Phase 2 clinical study of VYXEOS™ Liposome for Injection (or CPX-351) with newly diagnosed AML showed lower healthcare resource use than conventional chemotherapy (or 7+3) patients. Reasons for the decline in the share price since are unclear, as shares have now lost 8.8% over the past two trading days.
Celator Pharmaceuticals Inc (NASDAQ:CPXX) counted only three hedge fund supporters among those we track at the end of the fourth quarter. Included in this small group was First Eagle Investment Management, which had ownership of 612,600 shares of the company.
Encana Shares Volatile After Strong Session
Encana Corporation (USA) (NYSE:ECA) has been particularly volatile in Wednesday trading. After plummeting in the morning, it pared its losses around midday, and once again fell in the afternoon, even though gas prices are flattish and oil prices are up. The rocky day comes after Encana enjoyed a strong session on Tuesday, gaining over 7%.
26 funds in our database disclosed long equity stakes in Encana Corporation (USA) (NYSE:ECA) as of December 31. Among them was Andreas Halvorsen’s Viking Global, which held 3.99 million shares. On February 1 the firm declared a vast increase in its position, to 54.82 million shares.
Finally, there’s ArcelorMittal SA (ADR) (NYSE:MT), which is down by approximately 1.15% on Wednesday afternoon, giving up the gains that it enjoyed on Tuesday, which were driven by the announcement that the company will redeem all of its outstanding $1.40 4.5% Notes due February 25, 2017 on May 20. A press release stated that the Notes would be redeemed at a price “equal to the greater of (1) 100% of the principal amount of the Notes to be redeemed and (2) the sum of the present values of the Remaining Scheduled Payments (as defined in the indenture dated as of May 20, 2009, between ArcelorMittal and HSBC Bank USA, National Association, as trustee (the “Indenture”)) of the Notes to be redeemed, discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the Indenture) plus 50 basis points, in each case plus accrued and unpaid interest thereon to the Redemption Date.”
By the end of 2015, the largest ArcelorMittal SA (ADR) (NYSE:MT) shareholder among those we keep track of, was David Costen Haley’s HBK Investments, which owned 7.92 million shares of the company valued at more than $50 million.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.