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Why These Stocks Are On The Move

It’s Wednesday morning and traders are talking about the potential for the Fed to cuts rates if inflation dissapoints and also the AmCham China chairman Tim Stratford’s comments that some of its members are worried about China’s response to the U.S. adding Huawei to its ‘entity list’, which hurts the tech company’s ability to do various business with American companies. Among the other stocks traders are watching today include CVR Energy, Inc. (NYSE:CVI),  Nordstrom, Inc. (NYSE:JWN)Urban Outfitters, Inc. (NASDAQ:URBN)OncoSec Medical Incorporated (NASDAQ:ONCS), and LiqTech International Inc (NASDAQ:LIQT). Let’s analyze each further and see how the smart money is positioned among them.

Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

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CVR Energy, Inc. (NYSE:CVI) is on watch after the company announced that it has hired Bank of America Merrill Lynch as a financial advisor to help it evaluate potential strategic alternatives, including a possible sale. Management has no defined timeline for the exploration and there i no assurances that the evaluation will lead to any transaction. CVR Energy, Inc. (NYSE:CVI) was in 22 hedge funds’ portfolios at the end of December. CVI investors should pay attention to an increase in hedge fund sentiment lately. There were 21 hedge funds in our database with CVI positions at the end of the previous quarter.

Nordstrom, Inc. (NYSE:JWN) is in the red after the company reported EPS of $0.23 versus the consensus of $0.43 for Q1. Revenue was also softer at $3.35 billion, versus the consensus of $3.57 billion. The company also cut FY 19 net revenue guidance to down 2% to flat range from the previous up 1-2%.  Of the around 700-740 elite funds we track, 23 funds owned $223.5 million of Nordstrom, Inc. (NYSE:JWN) on December 31, versus 26 funds and $389.34 million respectively on September 30.

Urban Outfitters, Inc. (NASDAQ:URBN) is in the spotlight after it reported first quarter EPS of $0.31 on sales of $864.4 million, versus the consensus of $0.25 and $855.65 million. Comparable retail segment net sales rose 1%. 28 top funds were long Urban Outfitters, Inc. (NASDAQ:URBN) at the end of the fourth quarter, down 3 funds from the previous quarter.

OncoSec Medical Incorporated (NASDAQ:ONCS) is sharply lower in after hours is sharply lower in after hours on Tuesday after it announced a proposed public offering. The exact price and share size has yet to be disclosed.

LiqTech International Inc (NASDAQ:LIQT) is lower by around 12% after it announced a public offering of common stock. “LiqTech intends to use the net proceeds from this proposed offering to fund the growth of the business, including adding manufacturing capacity through equipment purchases, funding continued research and development efforts, for general corporate purposes, and the potential insourcing of currently outsourced manufacturing.”

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