Here’s Why These 5 Stocks Are Deep in the Red Today

Traders Sell Ericsson on Earnings

Ericsson (ADR) (NASDAQ:ERIC) shares have fallen by over 14% after the company released soft first quarter earnings of SEK0.87 or $0.11 per share. Although net profit rose by 49% year-over-year, revenue declined by 2.4% and gross margin inched lower by 2.3%. As a response, the company is reorganizing itself into five business units and one dedicated customer group for Industry & Society. CEO Hans Vestberg explained the rational behind the restructuring in a press release:

“We are today announcing structural changes to further accelerate strategy execution and drive efficiency and growth even harder across the company. We will create a leaner, more fit for purpose, organization to cater to the needs of different customer segments and to faster capture market opportunities. As 5G, the Internet of Things and Cloud drive the next phase of industry development, the time is right to make this change.”

Of the 786 active funds that we track, six of them owned $139.79 million worth of Ericsson (ADR) (NASDAQ:ERIC)’s shares on December 31, down from 11 funds on September 30, but well up from the $48.51 million in holdings those 11 funds owned. 

Independence Contract Drilling Down on Stock Offering 

Independence Contract Drilling Inc (NYSE:ICD) is almost one-fifth lower today after the company announced that it has launched an underwritten offering of 11.5 million shares of common stock at $3.50 per share. Underwriters will have a 30-day option to buy an additional 1.725 million shares. The company intends to use the net proceeds of $37.3 million to repay some debt and for general corporate purposes. Five top funds that we track owned 5.5% of Independence Contract Drilling Inc (NYSE:ICD) as of the end of 2015.

Lower Outlook Leads Traders to Sell Natural Grocers

Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) is 29% in the red due to lower guidance. For the second quarter of fiscal year 2016 ended March 31, Natural Grocers now expects sales of $176.5 million-to-$178 million and earnings of $0.15-to-$0.16 per share, well beneath the $184.4 million in sales and $0.26 per share in earnings that analysts were expecting. In a press release, Natural Grocers Co-President Kemper Isely described the challenging environment that lead to the weaker results:

“We expect our second quarter sales results will reflect the evolving and competitive natural and organic food retailing environment. To a lesser extent, we anticipate second quarter sales will be impacted by economic pressures in several of the markets we serve due to continuing low oil and gas prices and internally generated competition as a result of our opening of new stores in existing markets. Further, adverse weather in Colorado affected the key Easter holiday selling period. In addition, we were unable to quickly adjust expense levels to the moderated sales trends, resulting in pressure on store-level margins.”

Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) was in the portfolios of five funds tracked by Insider Monkey as of December 31, down by two funds quarter-over-quarter.

Disclosure: None