Oil prices are tumbling today, driven by the Brussels terrorist attacks and Libya’s unwillingness to attend a meeting to discuss a supply freeze. The Brussels attacks also led gold prices upwards, as investors flocked to traditionally safer assets. Meanwhile, the markets are largely flat, with major stock indexes moving less than 0.2%. However, a few stocks were not so lucky, having fallen by double digits today. Among them, investors can count Sunedison Inc (NYSE:SUNE), Dean Foods Co (NYSE:DF), G-III Apparel Group, Ltd. (NASDAQ:GIII), Mattress Firm Holding Corp (NASDAQ:MFRM) and CalAmp Corp. (NASDAQ:CAMP). Let’s take a look at the events behind these big declines, and see what the funds in our database think about these companies.
At Insider Monkey, we track more than 785 hedge funds, whose 13F filings we analyze as part of our small-cap strategy. Our research has shown that imitating a portfolio that includes the 15 most popular small-cap stocks among hedge funds can outperform the market by as much as 95 basis points per month on average (see more details here).
Back to the stocks that interest us, let’s start with Sunedison Inc (NYSE:SUNE). Shares of the solar energy company are down by more than 12% in the early afternoon after TerraForm Global Inc (NASDAQ:GLBL), one of its yieldcos, canceled its agreement to acquire Globeleq Mesoamerica Energy, a Central American renewable energy developer with projects in Honduras, Costa Rica and Nicaragua. Shares of TerraForm Global are trading down by roughly 5.25% on Tuesday afternoon themselves.
Shares of Sunedison Inc (NYSE:SUNE) have lost more than 73% in the last three months, and many investors fled the stock in the fourth quarter. On the other hand, the bulls are charging hard, taking advantage of the greatly depressed stock price to build up their positions. This is the case with David Einhorn’s Greenlight Capital. The fund declared holding 18.6 million shares of SunEdison as of the end of the fourth quarter, and in January disclosed a marked increase in its stake, to 27.15 million shares. On top of Greenlight, 49 other funds among those we track disclosed long positions in the company as of the end of the fourth quarter, with their stakes accounting for more than 31% of the company’s total shares.
Next up is Dean Foods Co (NYSE:DF), which has lost over 11% since the market opened, trading on more than double its average volume. It seems like the decline was triggered by Morgan Stanley’s reiteration of an ‘Underweight’ rating for the stock. The firm cited a potential margin contraction for the company in the wake of Wal-Mart Stores, Inc. (NYSE:WMT), its largest customer, announcing that it would be building a milk-processing plant of its own next year. According to analysts at Morgan Stanley, “While the impact of this Walmart announcement remains difficult to gauge and is admittedly a 2017 dynamic, it nevertheless underscores the challenges Dean faces in maintaining current margins, particularly if the company is forced to find further cost levers to offset incremental volume losses.”
As of the end of the fourth quarter, 18 funds among those we track were long Dean Foods Co (NYSE:DF). Their positions, valued at more than $191 million represented 12.2% of the company’s total shares. Joel Greenblatt’s Gotham Asset Management was the largest shareholder in our database at the end of 2015 with more than 2.82 million shares. However, on February 12, Dmitry Balyasny’s Balyasny Asset Management disclosed a new position comprising 4.86 million shares of the company.
Three more major losers in today’s session are analyzed on the following page.