Red Alert: Five Stocks That Are Getting Bloodied Today

Although all three indexes are lower, it’s a relatively quiet day on Wall Street. The VIX fear index is up by just 3% and below 15, while crude futures have rallied back to being down by just 1% this afternoon. Among the stocks suffering more noteworthy losses today are Tesco Corporation (USA) (NASDAQ:TESO), Tailored Brands Inc (NYSE:TLRD), Seadrill Ltd (NYSE:SDRL), KemPharm Inc (NASDAQ:KMPH), and Freeport-McMoRan Inc (NYSE:FCX). Let’s find out why traders are selling out of these five stocks and see how elite hedge funds have been trading these equities of late.

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).

Tesco Declines on Secondary Offering

Tesco Corporation (USA) (NASDAQ:TESO) is 7% lower today after the company priced its secondary offering of 7.00 million shares at $7.00 a piece. The underwriter of the offering, BofA Merrill Lynch, has the option to purchase an additional 1.05 million shares at the offering price. Tesco will use the net proceeds from the offering for general corporate purposes. Of the 766 active funds that we track, seven funds were long Tesco Corporation (USA) (NASDAQ:TESO) on March 31.

Tailored Brands Misses Earnings Expectations

Tailored Brands Inc (NYSE:TLRD) shares have retreated by almost 20% today after the company whiffed on its latest earnings report. For its fiscal first quarter, Tailored Brands earned $0.29 per share on revenue of $828.82 million, missing the consensus estimates by $0.16 per share and $13.21 million respectively. Sales fell by 6.4% year-over-year as comparable-store sales at Men’s Wearhouse retreated by 3.5% and comparable-store sales at Jos. A. Bank fell by 16% year-over-year. Despite the soft quarter, management continues to expect fiscal 2016 adjusted EPS of $1.55-to-$1.85. Tailored Brands Inc (NYSE:TLRD) was in 19 elite funds’ portfolios at the end of March, among the funds in our database.

On the next page we examine why investors are fleeing the shares of Seadrill Ltd, KemPharm Inc, and Freeport-McMoRan Inc.
Seadrill Declines 10% on Debt-to-Equity Swap

A few weeks after executing one debt-to-equity swap, Seadrill Ltd (NYSE:SDRL) announced that it will make another one to further cut its debt load. Under the terms of today’s swap, the company will issue 7.5 million new shares in exchange for $50 million principal amount of the 2017 Notes. Seadrill has around $3.7 billion of debt that matures by the end of next year. Shareholders hope that Brent prices will continue to rise so that future potential debt-to-equity swaps are less painful. Jim Simons‘ Renaissance Technologies owned almost 1.5 million shares of Seadrill Ltd (NYSE:SDRL) as of the latest 13F reporting period.

KemPharm Files NDA Amendment Request

KemPharm Inc (NASDAQ:KMPH) is off by almost 5% after the company filed an NDA amendment request for Apadaz, the company’s investigational abuse-deterrent candidate for the short-term management of acute pain. The amendment is aimed at providing the FDA with more data that KemPharm thinks is relevant. The amendment is expected to push back the previously announced target action date for the drug, which was June 9, 2016 (today). Of the hedge funds and other investment firms in Insider Monkey’s database, ten were long KemPharm Inc (NASDAQ:KMPH) at the end of the first quarter, owning 22% of its shares in aggregate.

Freeport-McMoRan Lower on Profit Taking, Oil

Freeport-McMoRan Inc (NYSE:FCX) is 6.8% in the red as some traders take profits off the table from the stock’s big run-up since February. Other traders are selling because WTI spot prices have retreated by 1.5% today. If crude prices run into turbulent conditions as more previously-held-back U.S. production comes onto the marketplace, WTI could decline and exacerbate Freeport-McMoRan Inc (NYSE:FCX)’s debt-to-EBITDA ratios. If crude prices rise, on the other hand, Freeport-McMoRan has more long-term upside left. Carl Icahn‘s Icahn Capital owned 104 million Freeport-McMoRan shares at the end of March.

Disclosure: None