Here’s Why Mobileye, Fitbit, & More are in the Red Today

With all three indexes in the green today, shares of Mobileye NV (NYSE:MBLY), Fitbit Inc (NYSE:FIT), Gladstone Capital Corporation (NASDAQ:GLAD), and ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) are heading in the opposite direction. Let’s take a closer look at why the four stocks are among today’s biggest losers. In addition, let’s analyze the latest trading action of elite investors in these stocks, if relevant.

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Mobileye NV (NYSE:MBLY) shares have fallen by over 10% this morning after Morgan Stanley’s Adam Jonas lowered his price target on the stock to $57 from $80. Although Jonas kept his ‘Overweight’ rating on the stock, his bear case is now $20 per share versus the previous $30 per share. Jonas had this to say in regards to his thinking:

“Although advanced ADAS penetration could lead to earnings growth, large tech players add potential risk to Mobileye’s market share, margins and terminal growth rate. While we continue to believe that Mobileye is in pole position to lead the next wave of advancements, we have revised our forecasts to show a greater awareness of the competitive landscape that is taking form.”

Last month, Citron Research labled Mobileye NV (NYSE:MBLY) as the ‘short of the year’ for 2016 because of future competition and valuation concerns. Given the trend of more autonomous cars, other players such as Alphabet Inc (NASDAQ:GOOG) and car makers from Detroit will grab market-share over the next few years. Silicon Valley start-ups, such as the one founded by 26 year-old hacker George Hotz, could eventually give Mobileye a run for its money too. According to our data, hedge funds were becoming less optimistic about the stock, as the number of smart money shareholders of Mobileye fell by seven to 32 during the third quarter.

Fitbit Inc (NYSE:FIT) can’t escape the GoPro Inc (NASDAQ:GPRO) comparisons, as shares of the wearable tech company are off by 4.79% this morning on worries that it will also face commoditization, lower margins, and weaker sales due to increased competition. Like GoPro, Fitbit Inc (NYSE:FIT) is somewhat of a ‘fad’ stock, with its EPS and revenue rising rapidly as consumers snap up the company’s ‘it’ products. Investors are selling today because they fear that Fitbit’s fundamentals might deteriorate if the company loses that ‘must have’ status. GoPro has largely lost that status, after the company warned that its fourth-quarter results will be worse than expected. Because of soft demand, GoPro now anticipates sales of $435 million for the quarter, substantially below its previous guidance of $500 million-to-$550 million and analyst expectations of $511.9 million.

20 elite funds held 2.4% of Fitbit’s shares as of the latest 13F reporting period. That’s down from 27 elite funds that held shares on June 30.

On the next page, we examine the sliding shares of Gladstone Capital Corporation and ZIOPHARM Oncology Inc.

Gladstone Capital Corporation (NASDAQ:GLAD) is 11.6% in the red on abnormally high trading volume as sentiment around the externally-managed, closed-end, non-diversified management investment company heads south. As a business development company, Gladstone Capital Corporation (NASDAQ:GLAD) has extended $5 million-to-$30 million debt loans to small and medium-sized businesses in the United States, some of which have been badly hurt by the falling oil and gas prices. Investors could be selling Gladstone on the fear that its net asset value will be worse than expected because of the energy price collapse. Three elite funds that we track held about 0.6% of the company’s float at the end of the third quarter.

ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) shares are 5% lower today as sentiment around the biotech company remains sharply negative. Although there is no specific news event causing today’s poor performance, momentum selling could have something to do with it, as ZIOPHARM Oncology Inc. (NASDAQ:ZIOP) has steadily retreated from the $12 level in early December. Hedge funds are growing less optimistic too, as the number of top shareholders fell by six quarter-over-quarter to nine as of September 30.

Disclosure: None