Stocks are trading down overall on Monday, as disappointing earnings, tumbling oil prices, and tension over the upcoming Federal Reserve meeting continue to cause anxiety among investors. Among the day’s decliners, we can count Koninklijke Philips NV (ADR) (NYSE:PHG), Independent Bank Corporation(MI) (NASDAQ:IBCP), Cabot Oil & Gas Corporation (NYSE:COG), Credit Suisse Group AG (ADR) (NYSE:CS), and Apple Inc. (NASDAQ:AAPL), all of which are posting losses in the early afternoon. What is driving these particular stocks down? Let’s find out. As well, we’ll take a look at what the hedge funds in our database think about the aforementioned companies.
Our research determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).
Koninklijke Philips’ Miss Is Not The Only Thing Worrying Shareholders
Let’s start with Koninklijke Philips NV (ADR) (NYSE:PHG), which is down by roughly 4.2% in Monday trading following the announcement of the company’s first quarter financial results as well as a possible IPO for its lighting unit. For the first quarter, the Netherlands-based firm posted EPS of EUR0.03 ($0.03), missing estimates by EUR0.09, on revenue of EUR5.52 billion ($6.22 billion), which came in EUR170 million ($191.65 million) ahead of the Street’s consensus. However, as mentioned above, it is not only the earnings miss that is pulling the stock down; management also indicated that it is leaning towards floating an IPO of its lighting unit, rather than selling it, as investors had expected. If the IPO takes place, the lighting unit could be valued at approximately EUR5 billion ($5.64 billion), and would leave Koninklijke Philips to focus on healthcare technology.
Among the funds that we track, ten were long Koninklijke Philips NV (ADR) (NYSE:PHG) as of the end of 2015. However, it should be noted that their combined stakes only accounted for 1.5% of the company’s outstanding shares.
Independent Bank Corporation Also Misses On Earnings
Next up is Independent Bank Corporation(MI) (NASDAQ:IBCP), which is down by 1.55% this afternoon. Before the bell rang this morning, the small-cap bank holding company posted EPS of $0.19, $0.01 below the Street’s consensus. Revenue of $19.8 million, however, beat expectations by $0.63 million.
Independent Bank Corporation(MI) (NASDAQ:IBCP) counted the support of nine hedge funds among those we track by the end of 2015. Among them, we could highlight Emanuel J. Friedman’s EJF Capital, which held 1.45 million shares, making it the largest institutional investor of record in the company.
We study the losses seen in shares of Apple and two other companies today on the next page.