With most of earnings season over and the Fed committed to low interest rates for longer, volatility on Wall Street is almost non-existent. The S&P 500 is up only marginally while the Dow Jones is down 27 points. Among the stocks falling today are EXCO Resources Inc (NYSE:XCO), Companhia Siderurgica Nacional (ADR) (NYSE:SID), Freeport-McMoRan Inc (NYSE:FCX), Eagle Point Credit Company Inc (NYSE:ECC), and Intrexon Corp (NYSE:XON). Let’s find out why investors are selling these stocks today and analyze hedge fund sentiment towards them.
While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).
EXCO Decline on Potential Restructuring
EXCO Resources Inc (NYSE:XCO)’s shares have plunged by 44% after the company announced that its board of directors had formed a committee to consider one or more strategic alternatives. Among the strategic alternatives is restructuring the company to improve its capital structure and to provide additional structural liquidity. That means potentially exchanging existing indebtedness for common stock, the issuance of equity, and divestiture of assets, among other things. EXCO Resources Inc (NYSE:XCO) had more than $1.3 billion of long term debt on its balance sheet at the end of March. Jim Simons’ Renaissance Technologies was among the top shareholders of EXCO at the end of 2015.
Companhia Siderurgica Nacional Down After Earnings
Companhia Siderurgica Nacional (ADR) (NYSE:SID) reported net income of 391.8 million reais ($111.68 million) for the first quarter of 2016, on revenue of 3.85 billion reais ($1.1 billion). Revenue at the company fell 4% year-over-year, while steel sales were 10% sequentially higher in tonnage terms. The results came in under expectations and the company’s shares are down 8% in afternoon trading. Four funds from our database owned $339,000 worth of Companhia Siderurgica Nacional (ADR) (NYSE:SID)’s stock heading into 2016.
On the next page, we examine the latest news regarding Freeport-McMoRan, Eagle Point Credit Company, and Intrexon Corp.