What Has Investors Spooked About These 4 Stocks Today?

Page 1 of 2

Halloween is approaching, where kids young and old roam the streets as ghosts, zombies, and other creatures of the night. Yet it’s not the looming threat of cities being overrun by little monsters that has investors frightened this morning, but the horror stories being woven by a handful of companies, whose stocks are under heavy selling pressure as a result. Let’s unmask the news haunting investors and see how long the trembling is likely to persist.

stocks, analysis, market, numbers, business, ticker, trade, money, price, investment, index, chart


We’ll start with Rovi Corporation (NASDAQ:ROVI), which has tumbled by just over 20% after its third quarter earnings missed the mark after its deal with an unnamed major consumer electronics manufacturer expired. Rovi Corporation (NASDAQ:ROVI) further warned that the low-end of its full-year guidance would be missed if a deal with that manufacturer was not renewed, negotiations towards which are currently being held. For its third quarter, profit slid to $0.29 per share, down from $0.42 EPS a year ago, and short of the $0.36 consensus estimate. Revenue also slid by more than 10% year-over-year to $114.88 million. Rovi Corporation (NASDAQ:ROVI) shares have now crumbled by more than 60% this year. The elite investors that we track were wisely vacating the stock in the second quarter, as ownership fell to 20 from 32.

Follow Rovi Corp (NASDAQ:ROVI)

Whether elite hedge funds collectively like a stock or not is an important metric to consider, as these large investors show a great level of skill and expertise when it comes to picking stocks. Over the last few years equity hedge funds have trailed the market by a large margin, but that’s mostly due to their hedging and short positions, which perform poorly in a bull market. Their long positions performed far better, especially their small-cap picks, which have the potential to beat the market by 95 basis points per month on average, as our backtests showed. Our small-cap strategy involves imitating a portfolio of the 15 most popular small-cap picks among hedge funds and it has returned 102% since August 2012, beating the S&P 500 ETF (SPY) by over 53 percentage points (read more details here).

A popular food stock among elite investors, GNC Holdings Inc. (NYSE:GNC) has disappointed today, falling by 25% after earnings and revenue both fell from a year ago, while analysts had been expecting an improvement. Earnings came in at $0.54 per share, widely missing estimates of $0.83, while revenue of $672.2 million missed by over $11 million. EPS and revenue were down by 24% and 2.7% respectively, year-over-year. It’s the second big blow in the past week for GNC Holdings Inc. (NYSE:GNC), which fell by 15% on October 22 after Oregon’s Attorney General filed a lawsuit against it alleging the use of the illegal ingredients BMPEA and picamilon in its supplements. GNC Holdings Inc. (NYSE:GNC) refuted the allegations, claiming they are “without merit”. Shares have now declined by over 38% year-to-date, a big blow to the bullish investors in our database, which held 27.00% of those shares on June 30, led by Ricky Sandler‘s Eminence Capital.

Follow Gnc Holdings Inc. (NYSE:GNCIQ)

On the next page we have the details on two more stocks, NXP Semiconductors and ABIOMED, that have given investors a good scare this morning.

Page 1 of 2