These 5 Stocks Are Making Big Moves; Here’s Why

With the VIX fear index well above 20 and crude prices fluctuating wildly, Vipshop Holdings Ltd – ADR (NYSE:VIPS), Genworth Financial Inc (NYSE:GNW), LightPath Technologies, Inc. (NASDAQ:LPTH), Energy Transfer Equity LP (NYSE:ETE), and Williams Companies Inc (NYSE:WMB) are among the market’s more volatile stocks on Tuesday, making big moves, both good and bad. Let’s analyze why investors are actively trading these stocks. Given that Insider Monkey does a lot of research into what the smart money likes and doesn’t like, let’s also analyze relevant hedge fund sentiment for these stocks.

In the eyes of most traders, hedge funds are assumed to be underperforming, old investment tools of the past. While there are more than 8,000 funds in operation at present, hedge fund experts at Insider Monkey look at the aristocrats of this group, around 730 funds. Contrary to popular belief Insider Monkey’s research revealed that hedge funds underperformed in recent years because of their short positions as well as the huge fees that they charge. Hedge funds managed to outperform the market on the long side of their portfolio (see the details here).

First and foremost, Vipshop Holdings Ltd – ADR (NYSE:VIPS) shares are 6.5% in the green today as negative sentiment around Chinese internet stocks takes a breather. After falling by almost 15% already in 2016 due to a depreciating Yuan and concerns of a slowing Chinese economy, the Shanghai index closed up by 0.2% today, giving investors in the country of over 1.4 billion people a much needed breather. Although the government has pretty much ruled out drastic demand-side stimulus measures, Xi Jinping is reportedly considering supply-side measures that could help the private economy realize its full potential. If China’s growth accelerates, Vipshop Holdings Ltd – ADR (NYSE:VIPS) will do well. Of the 730 elite funds that we track, 40 funds owned 14.70% of the company’s float on September 30. That was down by 14 elite funds from June 30 however.

Genworth Financial Inc (NYSE:GNW) continued to trend lower today, with its shares 14% in the red. Although there is no noteworthy news behind today’s decline, bearish momentum traders are likely playing a part, as Genworth Financial Inc (NYSE:GNW) shares are in perilous technical territory. After breaching the $2.50 per share level, the next level of support is $2.00. Although it trades for just 0.1-times book value, Genworth’s long-term care insurance contracts have made it a consistently unprofitable company. Not helping matters is the company’s exposure to commodity reliant countries such as Australia and Canada. The number of smart money shareholders of Genworth fell by nine to 28 during the September quarter.

On the next page, we examine LightPath Technologies Inc, Energy Transfer Equity LP, and Williams Companies Inc.

Shares of nano-cap LightPath Technologies, Inc. (NASDAQ:LPTH) continued their two month-long rally today, as LightPath shares have rallied by another 10% in afternoon trading. Like Genworth Financial, there is no specific fundamental news event causing LightPath Technologies, Inc. (NASDAQ:LPTH) shares to rally. Instead, traders are betting that the technical momentum will continue. Given the lack of fundamental datapoints, we would stay on the sidelines.

Energy Transfer Equity LP (NYSE:ETE) and Williams Companies Inc (NYSE:WMB) are down by 14% and 16% respectively today after ratings agency Fitch downgraded Williams Companies’ debt to junk bond status of ‘BB+’ from the previous ‘BBB-‘.  The Fitch downgrade follows Moody’s downgrade of Williams’ debt on January 8. Credit analysts are wary of Williams Companies’ debt because of Williams Partners’ higher-than-peer debt-to-adjusted-EBITDA ratio and the company’s exposure to Chesapeake Energy Corporation (NYSE:CHK).

Energy Transfer Equity LP (NYSE:ETE) shares are lower because Energy Transfer and Williams Companies agreed to merge last year (although the deal hasn’t closed yet). Shares of the two companies are also experiencing heavy selling pressure because crude prices are 3.37% in the red today as investors remain concerned about the over-supply situation.

Disclosure: None