Why Four of Last Night’s Biggest Losers Are Falling Further Today

U.S stocks are struggling to hold on to their gains after a better-than-expected jobs report has fueled talk that an interest rate hike in December may now be imminent. Lower oil prices have also put pressure on the market, but the stocks we are going to discuss in this article are plunging for completely different reasons. Let’s find out why investors are shying away from Glu Mobile Inc. (NASDAQ:GLUU), Men’s Wearhouse Inc (NYSE:MW), Sierra Wireless, Inc. (USA) (NASDAQ:SWIR) and Tripadvisor Inc (NASDAQ:TRIP) today.

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Glu Mobile Inc. (NASDAQ:GLUU) is sliding today, as investors were not impressed by the company’s latest financial report. For the three months ending September 30 the company posted revenues of $64.4 million, topping forecasts of $59.3 million, and a profit of less than $0.01 per share, in line with analyst expectations of break-even earnings. The mobile game developer has also announced a partnership with Tencent Holdings Limited, a Chinese provider of internet services, to bring the latter’s popular shooting game, WeFire, to international markets.

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Glu Mobile Inc. (NASDAQ:GLUU) gained some popularity among the hedge funds we follow during the second quarter, with 24 of them reporting a position in the company, up from 18 at the end of March. Together they held roughly 15% of the company’s outstanding shares. Israel Englander was among the fund managers that were bullish on the stock, having boosted his stake by 8% to 2.63 million shares, while Jim Simons upped his stake by 44% to amass 1.44 million shares, according to Renaissance Technologies’ latest 13F filing.

Men’s Wearhouse Inc (NYSE:MW) has released some preliminary results for the third quarter and things are not looking good at all for the men’s clothing retailer. Sales at Jos. A. Bank plunged by roughly 15% over the quarter and are expected to fall by 25% during the current quarter. Men’s Wearhouse was thus forced to revise its forward guidance and has cut its earnings estimates to a range of $0.46-to-$0.51, down from previous projections of $0.87 cents. Analysts, in turn, expected profits to come in at $0.99 per share. Shares have tumbled by more than 42% in the first hours of trading today.

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According to our data, 33 hedge funds that we track were invested in Men’s Wearhouse Inc (NYSE:MW) at the end of June, together controlling roughly 37.5% of the company’s outstanding shares. Ricky Sandler’s Eminence Capital sought to distance itself from the stock, having reduced its holding of the stock by 26% to 3.19 million shares. Phill Gross and Robert Atchinson, on the other hand, thought it was a good time to buy Men’s Wearhouse and increased their stake to 1.62 million shares.

Two more of the day’s worst performing stocks are discussed on the next page.

Shares of Sierra Wireless, Inc. (USA) (NASDAQ:SWIR), a provider of cellular wireless solutions, also took a hit this morning, with the company’s latest financial results coming in below analysts’ expectations. Sierra Wireless registered a 7.9% year-over-year increase in revenues to $154 million along with earnings per share of $0.23. The results, however, missed both their own forward guidance and Wall Street expectations, driving the stock 20% lower today. Because of a slowdown in the growth of its OEM solutions segment, Sierra Wireless has revised its fourth quarter projections to $148 million-to-$151 million in revenues and profits of $0.09-to-$0.11 per share.

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In general, Sierra Wireless, Inc. (USA) (NASDAQ:SWIR) is not very popular among the hedge funds that we follow, with only nine of them having reported a stake in the company as of the end of June. Together they held an insignificant 2.5% of the company’s outstanding stock. In its latest 13F filing, Royce & Associates, run by Chuck Royce, reported ownership of 199,500 shares of Sierra Wireless, down by 22% over the second quarter. This was also the largest holding of the stock among the funds we track.

Another earnings report, another victim; shares of Tripadvisor Inc (NASDAQ:TRIP) have tumbled today by as much as 10% after the online provider of travel and rental services missed analysts’ estimates. The company registered a 17% increase in revenues to $415 million, lower than Wall Street estimates of $430.2 million, while earnings of $0.53 per share were just shy of expectations. Tripadvisor registered a 23% increase in costs last quarter, as it was forced to increase selling and marketing expenditure to keep up with its competitors.

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At the end of the second quarter, Tripadvisor Inc (NASDAQ:TRIP) enjoyed the attention of 40 elite hedge funds, which held in aggregate roughly 10% of the company’s common stock. Ricky Sandler is bullish on this stock, with Eminence Capital having reported a 2% increase in its holding to 2.49 million shares, the largest among the funds we follow. Chase Coleman  also likes this company, having initiated a stake that amassed 1.22 million shares at the end of June.

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