Although crude futures have hit a monthly high and investors are calm, with the VIX fear index below 14, shares of several major companies such as Priceline Group Inc (NASDAQ:PCLN), Symantec Corporation (NASDAQ:SYMC), Infinera Corp. (NASDAQ:INFN), FirstEnergy Corp. (NYSE:FE), and Potash Corporation of Saskatchewan (USA) (NYSE:POT) are in the red today. In this article, we’ll analyze why each stock is taking a beating and examine how the smart money is positioned in each of the five stocks.
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Priceline Down on CEO Churn
Priceline Group Inc (NASDAQ:PCLN) is 0.75% lower after the online travel booking site’s CEO, Darren Huston, resigned effective immediately. Huston resigned following an investigation by independent members of the Board concerning Huston’s personal relationship with an employee of Priceline. The independent members of the board determined that Huston’s relationship with that employee was not within the company’s code of conduct. Former CEO and current chairman Jeffery Boyd will act as the Interim CEO until Priceline’s board finds a suitable successor. Stephen Mandel‘s Lone Pine Capital owned 834,421 shares of Priceline Group Inc (NASDAQ:PCLN) at the end of December.
Symantec Guides Lower
Symantec Corporation (NASDAQ:SYMC) reported some bad news on Thursday and its stock is down by 4.5% because of it. The first bad news item concerns CEO Michael Brown, who will step down once a successor has been found. CEO uncertainty is never good, as evidence by the above news article as well. The second bad news item was the company’s issuance of lower guidance for the fourth quarter of fiscal year 2016. Symantec now expects EPS of $0.22 on sales of $873 million, down from previous guidance of $0.24-to-$0.27 in EPS on revenue of $885 million-to-$915 million. Symantec Corporation (NASDAQ:SYMC) will report its fiscal fourth quarter earnings on May 12. 29 top funds that Insider Monkey tracks out of a total of 786 actively reporting funds held shares of Symantec at the end of 2015.
On the next page we examine why Infinera Corp, FirstEnergy Corp, and Potash Corporation of Saskatchewan (USA) are among the stocks sliding today.
Infinera Shares Plunge on Weak Guidance
Infinera Corp. (NASDAQ:INFN) has plunged by 23.5% after the company reported its first quarter earnings. For the first three months of the year, Infinera Corp. (NASDAQ:INFN) earned $0.19 per share on sales of $245.05 million, beating consensus earnings estimates by $0.02 per share but missing top-line estimates by $1.06 million. A major reason for the stock’s plunge however was soft guidance, as the company reported that it now expects second quarter revenue of $250 million-to-$260 million and EPS of $0.15-to-$0.19, beneath consensus estimates of $272.2 million in revenue and $0.22 in earnings per share. Weak global macro-economic conditions were cited as one reason for the soft guidance. The number of leading funds holding Infinera inched lower by two to 29 as of the end of December.
FirstEnergy Down After FERC Decides to Review Current and Future Income Guarantees
FirstEnergy Corp. (NYSE:FE) is 9.7% in the red after the Federal Energy Regulatory Commission (FERC) decided that it will review the income-guarantee plans that FirstEnergy gained approval for last month from Ohio’s public utilities commission. Given its role of ensuring that electric sales are fair, the FERC wants FirstEnergy to prove that its PPAs won’t harm the power market. The unusually long duration of the guarantees is one aspect of the deal that the FERC would like FirstEnergy to justify. Jim Simons‘ Renaissance Technologies was one of the top shareholders of FirstEnergy Corp. (NYSE:FE) at the end of 2015.
Potash Retreats on Earnings
Potash Corporation of Saskatchewan (USA) (NYSE:POT) turned in a mixed first quarter which has sent its shares down by 3.2%. For the January-to-March quarter, Potash earned $0.15 per share on sales of $1.21 billion, missing estimates of $0.16 per share and $1.16 billion, respectively. Average realized potash prices fell to $178 per tonne, down from $284 per tonne in the first quarter of 2015. Potash sales volumes also dropped to 1.8 million tonnes, down by 0.5 million tonnes from the same quarter a year ago. Management now sees full year 2016 EPS coming between $0.60 and $0.80, down substantially from the previous guidance of $0.90-to-$1.20.
Hedge funds in our database were less optimistic on Potash Corporation of Saskatchewan (USA) (NYSE:POT) in the fourth quarter. A total of 26 funds reported stakes in the company worth $768.29 million as of the end of December, down from 31 funds with stakes valued at $822.71 million at the end of September.