It’s been a rather quiet Friday on Wall Street as the NASDAQ has inched up, while the S&P 500 and Dow Jones are slightly in the red. Among the stocks with more volatility than most on Friday are Party City Holdco Inc (NYSE:PRTY), A. M. Castle & Co (NYSE:CAS), Yirendai Ltd – ADR (NYSE:YRD), GigPeak Inc (NYSEMKT:GIG), and Macy’s, Inc. (NYSE:M). In this article, let’s analyze why each stock is moving and see how the smart money is positioned in each stock.
While there are many metrics that investors can assess in the investment process, the hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details here).
Party City Holdco Continues its Slide
Party City Holdco Inc (NYSE:PRTY) is 3% in the red as investors continue to digest the company’s mixed first-quarter earnings report released yesterday. Although Party City beat earnings expectations by $0.01 per share, its revenue grew slower than expected. If Party City sales continue to underperform, the company might have a difficult time meeting its full year EPS guidance of $1.17 to $1.25. Eight funds from our database owned $40.04 million of Party City Holdco Inc (NYSE:PRTY) at the end of December.
Microcap Stock Slides After Boost
Momentum trading is alive and well as shares of microcap A. M. Castle & Co (NYSE:CAS) have retreated by 44% today after the stock surged by 58% from Monday to Thursday. The microcap stock surged on Tuesday because it announced that it had completed the sale of TPI for $55.1 million in cash and had sold the vast majority of energy-related inventory for net sales of $27.1 million. Despite the sale, the company remains heavily indebted. A. M. Castle & Co (NYSE:CAS)’s net debt-to-capital ratio was 92.3% at the end of March. The debt load could be the reason for today’s fall. 8 elite funds owned $18.96 million of A. M. Castle & Co (NYSE:CAS) at the end of 2015.
On the next page, we examine the latest news surrounding Yirendai, GigPeak, and Macy’s.
Technical Selling Detected At Yirendai
Traders may be taking some money off the table today after Chinese peer-to-peer lending company Yirendai Ltd – ADR (NYSE:YRD) surged by more than 200% from its February lows. Although there is no fundamental news concerning the company, shares of Yirendai Ltd – ADR (NYSE:YRD) are off by 7.25% on the day. Traders could also be selling because the peer-to-peer leader in the U.S, LendingClub Corp (NYSE:LC), has slid due to various reasons, including the resignation of its CEO, Renaud Laplanche. Of the 786 elite funds we track, 12 funds owned $19.5 million worth of Yirendai Ltd – ADR (NYSE:YRD) shares, which accounted for 3.50% of the float at the end of December.
Technical Buying Detected At GigPeak
Although there is no fundamental news concerning the company, GigPeak Inc (NYSEMKT:GIG) is 14% in the green today as traders buy on a technical breakout. Shares of the company have rallied over the past four quarters and the stock is now above some key moving averages. According to our database, Jim Simons’ Renaissance Technologies was among nine investors long GigPeak Inc (NYSEMKT:GIG) at the end of December. As with all micro-caps, investors should do their due diligence before making an investment decision.
Macy’s Up On Consumer Sentiment Survey
Macy’s, Inc. (NYSE:M) has inched up by 1% in late afternoon trading amid the release of a Reuters/University of Michigan consumer sentiment survey that showed the average U.S. consumer being more optimistic than in the past due to the improved job outlook, and more frequent income gains. If consumers are more optimistic, they will spend more, which will have a positive impact on Macy’s, Inc. (NYSE:M)’s financials. A total of 51 elite funds owned shares of the retailer at the end of the fourth quarter, down from 67 funds in the previous quarter.