U.S. stocks are down substantially on Monday trading, trailing European stocks, driven by concerns following the U.K.’s vote to leave the E.U. Also tumbling big-time are oil prices, the British pound, financial stocks and U.S. Treasury Yields.
Among the individual stocks posting large declines today are BT Group plc (ADR) (NYSE:BT), Vodafone Group Plc (ADR) (NASDAQ:VOD), Prudential Public Limited Company (ADR) (NYSE:PUK), Carnival Corp (NYSE:CCL) and Royal Caribbean Cruises Ltd (NYSE:RCL). So, let’s take a look into the events behind the moves of these stocks, and see what the funds in our database think about the companies in question.
At Insider Monkey, we track around 770 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see more details about our small-cap strategy).
BT Group Continues To Tumble On Brexit
Let’s start with BT Group plc (ADR) (NYSE:BT), which has lost over 6% during Monday intraday trading. The London-based communications services company will likely feel the impact of the Brexit, as it derives most of its revenue from the U.K. Nonetheless, it should be noted that its global services division will contribute with a larger chunk of sales, as foreign currencies will be worth more than they used to versus the Pound. Between Friday and Monday alone, shares of BT Group plummeted more than 22.75%. As of the end of the first quarter of 2016, BT Group plc (ADR) (NYSE:BT) counted 11 hedge funds in our database long the stock, almost double the number of supporters it had in the previous quarter. The largest institutional investor of record was Jim Simons’ Renaissance Technologies, which last disclosed ownership of 3.87 million shares, valued at more than $124 million on March 31.
Vodafone Also Suffers From Brexit
Next up is Vodafone Group Plc (ADR) (NASDAQ:VOD), another UK-based communications company that felt the full weight of the Brexit, losing 6.2% on Monday, even though the firm is transitioning to the Euro seeking to reduce currency volatility. Among the funds that we track, 21 held long stake in Vodafone Group Plc (ADR) (NASDAQ:VOD) at the end of March. Once again, Renaissance Technologies was a large shareholder, with almost 2 million shares, trailing Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, with 5.09 million shares.
Prudential Plc Slips, Becomes A Bargain
Shares of Prudential Public Limited Company (ADR) (NYSE:PUK) are trading down more than 12% on Monday, accompanying most stocks of UK-based companies that are plummeting on the result of the Brexit referendum. Following such a decline – more than 26% between Friday and Monday, several analysts are arguing that the stock is a bargain, as it trades at less than 11 times the company’s earnings and pays out a 4.28% dividend yield right now. Prudential Public Limited Company (ADR) (NYSE:PUK) saw the number of hedge funds in our database long its stock rise by 140% over the first quarter to 12.
Cruise Line Operators Sink Following Brexit
Another industry that received a strong blow after the Brexit was that of cruise line operators. Consequently, Carnival Corp (NYSE:CCL) has slipped by more than 4% on Monday. Among the elements helping drive the stock price down were EasyJet’s declarations that “that additional economic and consumer uncertainty is likely this summer,” when cruise lines usually see a substantial rise in demand rise substantially. On another note, Carnival will report its quarterly financial results on Tuesday. Carnival Corp (NYSE:CCL) counted on 48 funds from our database holding shares at the end of March, unchanged over the quarter. In this group we could highlight Kerr Neilson’s Platinum Asset Management, with 5.45 million shares, and Cliff Asness’ AQR Capital Management, with 4.89 million shares, or $258 million in stock.
Finally, there’s Royal Caribbean Cruises Ltd (NYSE:RCL), which has sunk by 4.75% on Monday, accompanying other cruise liners like Carnival and Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH), which is down 3.65% on Monday. Among the funds we track, 51 funds held shares of Royal Caribbean Cruises at the end of March, having amassed 5.7% of its outstanding stock.
Disclosure: Javier Hasse holds no interest in any of the securities or entities mentioned above.