Although the broader indexes are flat and crude futures have now recovered some of their earlier losses, shares of Trueblue Inc (NYSE:TBI), Lithia Motors Inc (NYSE:LAD), Mellanox Technologies, Ltd. (NASDAQ:MLNX), Intrexon Corp (NYSE:XON), and Werner Enterprises, Inc. (NASDAQ:WERN) are deep in the red today for various reasons. In this article we will analyze why traders are selling each stock and also see how the smart money is positioned in the five stocks.
At Insider Monkey, we track around 785 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details here).
Trueblue Inc (NYSE:TBI)‘s stock is being battered today after its latest earnings report was released yesterday evening. Although the company beat earnings estimates by a penny per share with EPS of $0.26, TrueBlue missed top-line estimates by $19.87 million with sales of $645.98 million. Adjusted EBITDA rose by just 9% year-over-year to $21 million. CEO Steve Cooper discussed the results in the press release:
“Our revenue growth slowed throughout the quarter, resulting in less overall revenue than expected. The current environment, which combines slowing demand with rising labor and sourcing costs, has created some sensitivity in pricing. That makes it more difficult to pass these higher costs along to customers.”
2016 full-year guidance was mixed, with the company expecting revenue of $2.8 billion-to-$2.9 billion, adjusted EBITDA of $158 million-to-$172 million, and adjusted net income of $2.10-to-$2.35 per share. Cliff Asness‘ AQR Capital Management was among 14 elite funds that we track which held shares of Trueblue Inc (NYSE:TBI) at the end of 2015. Shares of the company have retreated by 25% in today’s trading session.
Lithia Motors Inc (NYSE:LAD) narrowly beat both top and bottom-line expectations with first quarter EPS of $1.55 on revenue of $1.98 billion announced today. Same-store sales rose by 8% year-over-year while gross margin inched up 20 basis points to 15.5%. Guidance for the full 2016 year came in at revenue of $8.5 billion-to-$8.6 billion, diluted EPS of $7.30-to-$7.50, and a tax rate of 39.5%, while for the second quarter, the company guided for diluted EPS of $1.86-to-$1.90. Despite the healthy numbers, traders were expecting more apparently, as Lithia Motors Inc (NYSE:LAD) shares are down by 12% today. Larry Robbins‘ Glenview Capital was among 25 hedge funds in our system that held shares of the company as of December 31.