Here’s Why Traders Are Fleeing From These Five Stocks on Monday

Although the major indexes are mostly flat for the day, shares of Chemours Co (NYSE:CC), Fiat Chrysler Automobiles NV (NYSE:FCAU), KLX Inc (NASDAQ:KLXI), Transocean LTD (NYSE:RIG), and Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) are deep in the red for various reasons. Let’s find out why traders are selling these stocks and take a look at the hedge fund sentiment towards them.

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Technical Selling Detected At Chemours Co

Chemours Co (NYSE:CC) is 3% lower today as the stock consolidates its more than 200% surge since late January. The around $10 price level seems to be a short-term resistance point that the stock needs to pass before the rally can continue higher. After the surge Chemours is also no longer dirt-cheap with a forward P/E of 8.46. Of the around 766 elite funds we track, 30 funds amassed $307.12 million worth of Chemours Co (NYSE:CC) shares, which accounted for 24.20% of the float on March 31, versus 22 funds and $190.84 million, respectively, on December 31.

Fiat Chrysler Falls On Emission Report

Fiat Chrysler Automobiles NV (NYSE:FCAU) shares have retreated more than 4% after Germany’s Federal Motor Transport Authority determined that Fiat Chrysler had used illegal software to make emissions better than they actually were. Fiat Chrysler has in turn said that all of its vehicles meet European regulations. It is unclear what the fallout will be because Italy, not Germany, is responsible for testing Fiat cars under EU law. So far, the Italian government hasn’t taken any action, although this weekend’s news story might prompt them to take another look. Fiat Chrysler Automobiles NV (NYSE:FCAU) was in 28 funds’ portfolios at the end of March.

On the next page, we examine KLX, Transocean LTD, and Petroleo Brasileiro.

KLX Inc Falls 16% After Reporting Disappointing Earnings

KLX Inc (NASDAQ:KLXI) reported mixed results for its first quarter, with earnings of $0.42 per share on revenue of $368.2 million, beating the bottom-line estimate by $0.12 per share but missing the top-line by $15.42 million. Consolidated revenues declined by 14.7% year-over-year as the low energy prices weighed on the company’s Energy Services Group. Free cash flow was $22.2 million, while operating margin stood at 18.1%. Despite the mixed report, management believes the company’s core ASG business will still maintain low single digit long term growth in revenues and an operating margin in excess of 18 percent on a GAAP basis. Seth Klarman’s Baupost Group owned 2 million shares of KLX Inc (NASDAQ:KLXI) at the end of the first quarter.

Lower Oil Prices Weigh on Transocean 

Transocean LTD (NYSE:RIG) is 3% lower today after Seadrill Ltd (NYSE:SDRL) reported that one of its customers canceled an offshore contract for a drilling rig. Investors are afraid that the same situation could occur to Transocean LTD (NYSE:RIG) too if Brent prices remain low. Brent prices, incidentally, are down 1.7% in late afternoon trading on the back of profit taking. Carl Icahn’s Icahn Capital LP was one of the top shareholders of Transocean at the end of March.

Petrobras Declines Despite Barron’s Write-Up

Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR) is 4.5% in the red despite the fact that Barron’s published a column stating that the company was under-priced given the prospect of ‘firmer oil prices and possible lower interest rates’. Although Petrobras recently added Pedro Parente as its new CEO, some traders could be taking profits after the stock’s remarkable rally in recent months. Also adding to the selling is the fact that Brent prices are in the red. Among the investors we track, 23 funds owned $224.73 million worth of Petroleo Brasileiro SA Petrobras (ADR) (NYSE:PBR)’s shares, which accounted for 0.60% of the float on March 31, versus 24 funds and $165.89 million, respectively, on December 31.

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