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.
Another big loser on Tuesday afternoon is G-III Apparel Group, Ltd. (NASDAQ:GIII), which is down by more than 17% after the company reported disappointing fiscal year 2016 fourth quarter results and guided for fiscal year 2017 first quarter earnings below consensus estimates. The apparel firm posted fiscal fourth quarter earnings of $0.17 per share, missing estimates widely, by $0.25. Revenue of $527.43 million also came in a hefty $45.58 million below expectations. Furthermore, while sales grew by only 3% year-over-year, inventory surged by 14%. Finally, management guided for fiscal year 2017 EPS of $2.55-to-$2.65, well below the $3.14 consensus.
Among the firms that we track, 20 were long G-III Apparel Group, Ltd. (NASDAQ:GIII) on December 31. The largest stake was that of Columbus Circle Investors, the fund managed by Clifford G. Fox, which declared holding 1.29 million shares valued at more than $57 million as of the end of 2015.
Also tumbling on its latest financial results is Mattress Firm Holding Corp (NASDAQ:MFRM), which is down by roughly 10% this afternoon. On late Monday, the retailer reported fourth quarter earnings of $0.53 per share, $0.03 below the Street’s consensus, on revenue of $618.55 million, which missed expectations by $3.81 million. In addition, President and ex-COO Ken Murphy was appointed as the company’s new chief executive officer, while Steve Stagner was chosen to serve as the executive chairman of the company and chairman of its board of directors.
Mattress Firm Holding Corp (NASDAQ:MFRM) was a popular stock among the investors that we track in the fourth quarter, as it saw a 30% increase in hedge fund support. 17 held long positions in the company on December 31, and owned 30% of the company’s outstanding stock. David S. Winter and David J. Millstone’s 40 North Management, which was the largest shareholder in our system at the end of last year, continued to boost its exposure to the stock during the first quarter of 2016, taking its holding to 3.63 million shares as of February 18, from 3.08 million shares at the end of 2015.
Finally, there’s CalAmp Corp. (NASDAQ:CAMP), which has lost roughly 10% since the bell rang this morning. On Monday evening, the company trimmed its guidance for the ongoing quarter (the fourth quarter of fiscal year 2016); management now expects revenue of $71 million, down from a prior projection of $73 million-to-$78 million, and below the consensus estimate of approximately $76 million. CEO Michael Burdiek blamed the lower than expected sales on “MRM product supply constraints and the slow responsiveness of a supply chain partner following the Chinese New Year,” which was exacerbated by “irregular order flow for MRM products following the year-end holidays.”
Support for CalAmp Corp. (NASDAQ:CAMP) increased by 14% during the fourth quarter, with 16 firms among those we track long the stock. The largest stake, comprising 260,000 shares worth roughly $5.1 million, was held by Jeffrey Moskowitz’s Harvey Partners.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned in this article.