Smith & Wesson Giving Back Yesterday’s Gains, Plus 4 Other Sinking Stocks

After falling sharply upon the ringing of the opening bell, the markets are making a comeback attempt of sorts. The Nasdaq, S&P 500, and Dow are each down by around 0.3% after being 0.6% in the red earlier in the day. Sentiment has been bolstered in part due to rumors that the ECB and Bank of England will backstop the financial markets if Britain leaves the EU. Among the stocks in the red today are Smith & Wesson Holding Corp (NASDAQ:SWHC), Western Gas Equity Partners LP (NYSE:WGP), Navistar International Corp (NYSE:NAV), Shire PLC (ADR) (NASDAQ:SHPG), and KemPharm Inc (NASDAQ:KMPH). Let’s dive in to why these stocks are sinking today and see what elite funds think of each of them.

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Smith & Wesson Falls on Profit Taking

After surging yesterday due to early-Sunday’s tragic event in Orlando in which 49 people were killed at a gay nightclub, Smith & Wesson Holding Corp (NASDAQ:SWHC) shares are the victim of profit taking today. Shares of the gun-maker are down by 4.7% in afternoon trading, putting the stock close to where it traded before the weekend’s events. Although Smith & Wesson might experience a short-term bump in demand from the event, it is unclear whether the shooting in Orlando will increase demand for guns in the long run, especially if gun control laws in the U.S are tightened. 24 elite funds in our database were long Smith & Wesson Holding Corp (NASDAQ:SWHC) at the end of the first quarter.

Western Gas Deflates on Limited Partner Offering

Western Gas Equity Partners LP (NYSE:WGP) is almost 10% lower after the company announced that its limited partner, Western Gas Resources, priced a previously announced offering of 12.5 million common units representing limited partner interests. The gross proceeds to Western Gas Resources will be around $481 million. Underwriters also have a 30-day option to buy an additional 1.875 million shares. Western Gas Equity Partners, LP did not divest any units in the public offering. Jim Simons‘ Renaissance Technologies was a major shareholder of Western Gas Equity Partners LP (NYSE:WGP) at the end of March.

On the next page we examine why Navistar International, Shire PLC, and KemPharm are getting hit hard today.

Analysts Give the Thumbs Down to Navistar 

Navistar International Corp (NYSE:NAV) shares are 12% in the red after analysts at Stifel Nicolaus downgraded the stock to ‘Sell’ and set a $10 price target on it, citing declining medium and heavy-duty truck production, which could hurt the company’s ability to gain back lost market share. Shares of the company are not exactly cheap either with a forward P/E of over 16. 15 top funds that we track had a long position in Navistar International Corp (NYSE:NAV) as of the most recent 13F reporting period, down by one fund from the close of the previous quarter.

Shire Slips After Drug Purchase

Shire PLC (ADR) (NASDAQ:SHPG) shares are off by 2% after the company acquired the global rights for all indications to Pfizer Inc. (NYSE:PFE)’s PF-00547659. The acquisition of the investigational biologic for the treatment of moderate-to-severe inflammatory bowel disease improves Shire’s leading gastrointestinal unit. Financial terms of the deal were not disclosed. 49 funds in our system were bullish on Shire PLC (ADR) (NASDAQ:SHPG) at the end of the first quarter, up by nine funds from the end of 2015.

KemPharm Falls on CRL 

KemPharm Inc (NASDAQ:KMPH) shares have retreated by 25% after the FDA issued a Complete Response Letter (CRL) for Apadaz, the company’s investigational abuse-deterrent product candidate for the short-term management of acute pain. A complete response letter is issued when the review of an NDA is complete and the application is not approved in its present form. KemPharm is evaluating the points raised in the CRL and intends to request a meeting with the FDA to determine a path forward for Apadaz. Of the 766 elite funds that we track, ten owned $46.21 million worth of KemPharm Inc (NASDAQ:KMPH) shares in aggregate, which accounted for 22.00% of the stock’s float on March 31.

Disclosure: None