Among the largest decliners today are Sonic Corporation (NASDAQ:SONC), down by a little over 8%, CONN’s, Inc. (NASDAQ:CONN), slipping by just under 5%, and Raptor Pharmaceutical Corp. (NASDAQ:RPTP), falling by more than 5% so far in the day. Let’s look at the actions causing the downward movements in these stocks and whether hedge funds seeing any redeeming qualities in them.
Starting with Sonic Corporation (NASDAQ:SONC), the restaurant chain announced its same-store sales numbers for fiscal year 2015 yesterday, which has resulted in an 8% dip in the stock today. Sonic Corporation reported that its same-store sales were up by 7.3% for fiscal year 2015 which ended on August 31, as the company’s drive-in sales were up by 6.9% and its franchise drive-in sales rose by 7.3%. The company also reported a 4.9% growth in same-store sales for the fourth quarter of fiscal 2015. The company expects the same-store sales to grow by just 2-4% during fiscal 2016. It was likely the latter point which was not received well by investors and has led to the stock decline today.
Let’s take a look at hedge fund activity on Sonic Corporation (NASDAQ:SONC) now. By the end of June, there were 24 hedge funds with an aggregate investment of $185.4 million in the stock. The number of bullish hedge funds increased from 21 at the end of first quarter and the total investments went up from $130.9 million, despite a 10% decrease in shares during the second trimester, so hedge funds were rather bullish on this stock overall. Hedge funds in our database also held around 12.4% of the company’s outstanding shares. Among the hedge funds that we track, Richard Chilton’s Chilton Investment Company leads the way with 2.2 million shares valued at $65.5 million as of June 30. Israel Englander‘s Millennium Management increased its holding in the stock by 133% to 1.1 million shares during the same period. Among the hedge funds that opened fresh positions in the stock were Dmitry Balyasny’s Balyasny Asset Management, which opened a new position of around 620,000 shares.
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Let’s move on to CONN’s, Inc. (NASDAQ:CONN), which is trading in the red following a downgrade by Stifel Nicolaus, which downgraded the stock to ‘Hold’ from a ‘Buy’ rating in a research note published to its clients earlier today. Since the end of June, CONN’s, Inc. has lost more than 35% of its value, including the dip today. Looking at the hedge fund sentiment towards CONN’s, Inc. based on the latest round of 13F filings, there were 24 hedge funds we track holding long positions worth $829 million in the company at the end of June. The number of funds bullish on the company increased from 21 at the end of March, and the aggregate value of their holdings increased from $689.6 million amid a 31% increase in the stock. Moreover, it’s important to point out that investors from our database held over 57.2% of the company’s shares at the end of the second quarter, a substantial amount. Among the hedge funds tracked by Insider Monkey, Christian Leone’s Luxor Capital Group held the largest position in the stock, of around 6.6 million shares valued at $263.2 million. Jason Karp’s Tourbillon Capital Partners has increased its holding in the stock by 131% to 1.5 million shares during the second trimester. Robert Pohly’s Samlyn Capital opened the largest fresh position in the stock by purchasing around 1.46 million shares. On the contrary, David Einhorn‘s Greenlight Capital opted to bid good bye to CONN’s, Inc. (NASDAQ:CONN).
Finally, let’s look at Raptor Pharmaceutical Corp. (NASDAQ:RPTP), which dropped by more than 35% on Monday following the failure of one of its drug trials. The company reported on Monday that results from its Phase 2b CyNCh trial did not meet the endpoint target of improving nonalcoholic steatohepatitis (NASH) in children. Investors reacted be dumping the stock with force and the stock continues to dip further today. Since the end of the second quarter, Raptor Pharmaceutical Corp. (NASDAQ:RPTP) has lost more than 55% of its value. Looking at the hedge fund activity on Raptor Pharmaceutical Corp. (NASDAQ:RPTP), there were 22 hedge funds with a net investment worth $135.8 million in the stock at the end of June. It is worth noting that there were only 12 bullish hedge funds at the end of March and the net investment in the stock surged from $35.3 million amid a 45% stock value appreciation. Hedge funds in our database held around 10.7% of the company’s total outstanding shares. David E. Shaw’s D E Shaw held the largest position in the stock, of around 2.2 million shares valued at $35.2 million at the end of second quarter. D E Shaw increased its holding by 151% during the second trimester. James Dondero‘s Highland Capital Management increased its position in the stock by 689% to 1.2 million shares during the same period. Among the hedge funds that opened fresh positions in the stock, Kevin Kotler’s Broadfin Capital opened the of them by purchasing around 1.3 million shares during the second quarter.
Disclosure: None
