The US stock market (similar to the markets around the world) is slightly in green today before the G-20 summit that will take place this weekend. The differing circumstances in each country impede a specific and shared approach to underpin global growth. Finance ministers and governors agree that greater coordination is needed to revive the weak global growth. Some want to continue to implement an expansionary fiscal and monetary policy while others argue that it is time to carry out structural reforms. Meanwhile, among the stocks in the spotlight today are Sunedison Inc (NYSE:SUNE), J C Penney Company Inc (NYSE:JCP), Goldcorp Inc. (USA) (NYSE:GG), Peregrine Pharmaceuticals (NASDAQ:PPHM) and Republic Airways Holdings Inc. (NASDAQ:RJET). Let’s take a closer look at the development behind the moves registered by these stocks and assess the relevant hedge fund sentiment towards them.
We believe that imitating hedge funds and other large institutional investors can be helpful in identifying stocks capable of outperforming the broader market. Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see more details here).
First on the list is Sunedison Inc (NYSE:SUNE), whose stock is well in the green, advancing by 38%, after the company has won an injunction filed by David Tepper‘s Appaloosa Management in its agreement with TerraForm Power Inc (NASDAQ:TERP). A judge has ruled against David Tepper’s injunction regarding the acquisition of some assets from Vivint Solar. Under the terms of the merger, SunEdison’s TerraForm Power yieldco is supposed to buy 470 megawatts of Vivint assets for $799 million, but Appaloosa Management has attempted to block the purchase. The hedge fund, which owns a 9.5% stake in Terraform, said the deal benefited SunEdison more than the yieldco’s shareholders, and would change the business model and make the firm take $960 million in debt. Late last year, David Tepper requested to inspect the Terraform Power’s books. During the fourth-quarter, Sunedison Inc (NYSE:SUNE) registered a decrease in popularity among the funds that we track, with 50 investors holding long positions at the end of December, versus 73 funds a quarter earlier; they amassed 31.8% of Sunedison’s stock at the end of 2015. Among them, David Gallo‘s Valinor Management was the largest shareholder, reporting ownership of 22.24 million shares in its latest 13F filing.
Second in our list of moving stocks is J C Penney Company Inc (NYSE:JCP), whose shares are up by 12% on the back of the company releasing strong financial results. For the fourth fiscal quarter ended January 30, J C Penney reported EPS of $0.39 on revenue of $4.0 billion, exceeding analysts’ estimates by $0.16 per share and $10 million, respectively. For the full fiscal year, the company registered a loss of $1.03 per share on revenue of $12.6 billion. The firm’s adjusted gross margin rate inched up by 1.2 percentage points to 36.0%. In addition, management expects the company to achieve a comparable store sales growth in the range of by 3%-4%. A total of 27 funds from our database amassed 13.4% of J C Penney Company Inc (NYSE:JCP)’s float at the end of the fourth quarter, down by eight funds from the previous quarter. Jim Simons’ Renaissance Technologies was the top shareholder in our list, with 17.93 million shares held at the end of December.
On the other hand, Goldcorp Inc. (USA) (NYSE:GG)’s shares have lost around 10% today, due to an unexpected loss in its financial results for the fourth quarter of 2015. The gold mining company posted a loss of $0.15 per share, which represents a decline from a profit of $0.07 per share registered a year earlier. The company’s revenue of $1.07 billion has increased by 28% year-over-year. In this way, Goldcorp’s revenue was in-line with the estimates, but the bottom line fell short of the consensus estimate of $0.16. Goldcorp Inc. (USA) (NYSE:GG) also cut its dividend to $0.08 from $0.24 per share. In addition, it has changed its payment schedule so that future dividends will be paid quarterly. Also, the company lowered its production outlook and expects to produce between 2.8 and 3.1 million ounces of gold this year, below the 3.46 million figure in 2015. During the fourth quarter, Goldcorp Inc. (USA) (NYSE:GG) registered a decrease in popularity among the fund we track and the number of investors with long positions slid to 25 from 29. First Eagle Investment Management owned 39.48 million shares of Goldcorp at the end of December.
Peregrine Pharmaceuticals (NASDAQ:PPHM)’s stock fell by more than 60% after the company announced the interruption of its bavituximab chemotherapy program. The company said on Thursday that it will discontinue Phase III studies involving patients with lung cancer, based on the recommendation of the Data Monitoring Committee (IDMC), following analyses that revealed that patients had not shown a significant improvement. Peregrine Pharmaceuticals is not so popular among the investors in our database and just six investors reported long positions as of the end of December, amassing 1.50% of the company’s outstanding stock. Among these funds is Jim Simons’ Renaissance Technologies, with a holding of 1.39 million shares.
Last but not least, Republic Airways Holdings Inc. (NASDAQ:RJET)’s shares are more than 70% in the red after the company filed for Chapter 11 bankruptcy protection in a New York court. CEO Bryan Bedford pointed to several quarters of falling revenues and stopped aircrafts on the ground amid a shortage of pilots. Despite the difficult scenario to overcome, the company said it has sufficient assets to meet its obligations. Of the 730 funds that we track, 13 investors held 29.0% of Republic Airways’ stock at the end of December. Among the funds long the stock is Andrew Axelrod’s Axar Capital with a holding of 5.04 million shares.