Four stocks are making big moves in the wrong direction today, which should certainly be cause for concern for investors. Let’s find out why these stocks are taking a dive this morning and whether there could be some merit in grabbing them on the dip based on the sentiment held for them by the best money managers in the world.
Altisource Asset Management Corp (NYSEMKT:AAMC)
- Elite Investors with Long Positions (as of June 30): 5
- Aggregate Value of Elite Investors’ Holdings (as of June 30): $67.18 Million
- Percentage of Shares Owned by Elite Investors (as of June 30): 20.90%
We’ll start with Altisource Asset Management Corp (NYSEMKT:AAMC), which has fallen by 14.29% in morning trading. The poor performance comes on the heels of two consecutive strong trading sessions for the stock, which saw it rise by a total of just under 30% during that time. As such, the action today could simply be a small pullback after the robust gains of the previous two days, as there is no notable news concerning the stock today.
Investors are doubtlessly wondering where the bottom is for Altisource Asset Management Corp (NYSEMKT:AAMC), which has fallen by nearly 90% this year. The asset management company primarily advises Altisource Residential Corp (NYSE:RESI), an REIT focused on single-family rental properties, its portfolio of which Altisource Asset is working to grow. Altisource Residential Corp (NYSE:RESI) has also struggled of late, hitting a 52-week low on October 1. The performance of Altisource Asset has been a blow to Christian Leone’s Luxor Capital Group, which held the majority of the shares, 397,665 to be precise, collectively held by the five funds in our database which had long positions in the stock on June 30.
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).
MiMedx Group Inc (NASDAQ:MDXG)
- Elite Investors with Long Positions (as of June 30): 22
- Aggregate Value of Elite Investors’ Holdings (as of June 30): $65.64 Million
- Percentage of Shares Owned by Elite Investors (as of June 30): 5.20%
Shares of MiMedx Group Inc (NASDAQ:MDXG) are down by 6.5% today, with the drop also coming on the heels of a strong trading session yesterday, when they gained about 4.6%. MiMedx announced its third quarter results yesterday, which included record revenue of $49 million, a 46% increase year-over-year. It was also the 16th consecutive quarter that the medical device maker has met or exceeded its revenue guidance. However, it also announced a $50 million Senior Secured Credit Facility, greater details of which were divulged in an 8-K filing with the SEC this morning, which may have prompted the pullback. The deal includes a $5 million swing line sub-facility and a $10 million letter of credit sub-facility, with the maturity date of the revolving credit facility dated October 12, 2018.
MiMedx Group Inc (NASDAQ:MDXG) was the least popular stock covered in this article among the investors we track, at least in terms of the percentage of shares they held. MiMedx Group is nonetheless found in the portfolios of a number of healthcare investors that we follow, including Justin John Ferayorni’s Tamarack Capital Management and James A. Silverman’s Opaleye Management.
On the next page we have the details of two more of the day’s biggest losers, including a popular small-cap tech stock.
Qlik Technologies Inc (NASDAQ:QLIK)
- Elite Investors with Long Positions (as of June 30): 32
- Aggregate Value of Elite Investors’ Holdings (as of June 30): $865 Million
- Percentage of Shares Owned by Elite Investors (as of June 30): 27.10%
Qlik Technologies Inc (NASDAQ:QLIK) is the aforementioned tech stock, the company being a provider of the analytical software QlikView in addition to other business tools and services. Shares are down by 5.35% today, though it’s still enjoying a strong year overall, up by 18.45%. In a press release this morning, Qlik announced its new Qlik Proactive Support service for the detection of anomalies in networks and databases in real-time, which it believes will transform it from a reactive service into a more proactive (hence the name) one. However, investors are also worried about Amazon.com, Inc. (NASDAQ:AMZN)’s push into big data with Amazon Space Needle, and the effect it will have on companies like Qlik and Tableau Software Inc (NYSE:DATA). Qlik Technologies Inc (NASDAQ:QLIK) ranked as a top tech pick of ‘Tiger Cub’ Ian Murray as of June 30, with the investor’s fund Lanexa Global Management holding 100,000 shares.
OvaScience Inc. (NASDAQ:OVAS)
- Elite Investors with Long Positions (as of June 30): 14
- Aggregate Value of Elite Investors’ Holdings (as of June 30): $210 Million
- Percentage of Shares Owned by Elite Investors (as of June 30): 26.70%
Lastly is OvaScience Inc. (NASDAQ:OVAS), which has shed 7.22% of its market value today. Insiders seem to believe the company has reached rock bottom after a 74.31% drop this year, as two Directors of the fertility company recently purchased shares. OvaScience was forced to cut its guidance for 2015 at the end of September as overseas sales of its in-vitro fertilization product Augment, failed to meet expectations. Shares fell by over 40% on September 29 following the guidance cut, but have slowly trended back up since, gaining 34% even factoring in today’s pullback. Phill Gross and Robert Atchinson’s Adage Capital Management have been firm believers of OvaScience Inc. (NASDAQ:OVAS) since early 2014 and held 2.53 million shares on June 30.