Why Are These Stocks Tanking Today and Should you Buy Them on the Dip?

Then there is Sientra Inc (NASDAQ:SIEN), a $110 million medical aesthetics company, whose stock has slid by more than 12% after the company sent a letter to plastic surgeons, in which it suggested that they should stop implanting Sientra devices made by its Brazilian contract manufacturer, Slimed. The decision came after the US Food and Drug Administration had discussed with Sientra Inc (NASDAQ:SIEN) regarding regulatory inquires into products made by Slimed. Last week, the stock lost over 20% on the back of the Brazilian regulator suspending production at Slimed (see article). Hedge funds from our database were also bullish on Sientra Inc (NASDAQ:SIEN), even though the company is not very popular among them. Only six funds reported stakes worth $129.77 million as of the end of June, which represented 34.50% of the company and was higher than $97.27 million held by five funds a quarter earlier. However, with the stock down by over 70% in the last month, it is very likely that the sentiment will change. As a first sign, Samuel Isaly’s Orbimed Advisors has been unloading shares of Sientra Inc (NASDAQ:SIEN) for the last several weeks, last reporting ownership of some 2.07 million shares, as compared to 3.19 million shares reported in its latest 13F. Another healthcare-focused fund that owns shares of Sientra is Jacob Gottlieb’s Visium Asset Management, which disclosed holding 1.48 million shares in its last 13F.

HeartWare International Inc (NASDAQ:HTWR) is another healthcare stock that fell by over 12% on Monday, without any significant news from what it looks like. The stock has been in the red for the past month, losing over 30% since September 14. Last week, Glenn Welling’s Engaged Capital, which initiated a stake and became one of the top 20 shareholders of the company, urged HeartWare International Inc (NASDAQ:HTWR) to terminate its acquisition of Valtech Cardio, Ltd, saying that the deal would dilute the shareholders and drive higher the business risks. However, the company has issued a statement saying that it disagrees with the investor, despite the fact that the market has a similar opinion, as the stock lost over 20% after the Valtech Cardio acquisition was announced. The general outlook on HeartWare International Inc (NASDAQ:HTWR) among the funds that we track is positive as 15 funds from our database amassed over 16% of the company during the second quarter. While the number of funds increased by five during the quarter, the aggregate value of their holdings fell to $201.93 million from $238.50 million. The top shareholder among these investors was Phill Gross and Robert Atchinson‘s Adage Capital Management, which owned 1.83 million shares at the end of June.

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