Look Out Below! What’s the Deal With These 5 Falling Stocks?

The broader indexes are well in the green today, as new home sales surged by 12.4% in July to hit their 9-year high, outpacing supply in the process.

Five equities aren’t enjoying the same banner day as the broader market however, as they are deep in the red in early afternoon trading. We’ll see why traders are shinning Sophiris Bio Inc (NASDAQ:SPHS), Zoe’s Kitchen Inc (NYSE:ZOES), Premier Inc (NASDAQ:PINC), Tuniu Corp (NASDAQ:TOUR), and Kirkland’s, Inc. (NASDAQ:KIRK) today in this article, and use the latest SEC filings to see how hedge funds have been trading each stock.

Our backtests that covered the period between 1999 and 2012, showed that following the 15 most popular small-caps among hedge funds can help a retail investor beat the market by an average of 95 basis points per month (see the details here).

Sophiris Falls Sharply on Secondary Offering

Sophiris Bio Inc (NASDAQ:SPHS) is 32% in the red due to a lower-than-expected secondary offering in which the biopharmaceutical company issued 6.5 million common shares and related warrants to buy another 4.875 million shares, for a combined price of $4 per share and related warrant. The warrants have an exercise price of $4 per share, and the gross proceeds to Sophiris are expected to amount to around $26 million. Of the 749 13F-filing hedge funds that Insider Monkey tracks, just three funds were long Sophiris Bio Inc (NASDAQ:SPHS) at the end of June, owning 4.90% of its float.

Zoe’s Kitchen Down on Earnings

Zoe’s Kitchen Inc (NYSE:ZOES) shares have fallen by almost one-fifth in morning trading after the restaurant chain provided underwhelming guidance. Although its second quarter earnings of $0.06 per share were in-line with estimates and its revenue of $66.3 million only narrowly missed the consensus target, by $0.98 million, the restaurant chain’s guidance was a relative disappointment. For the full year, management expects sales of $277 million-to-$280 million, down from the previous guidance range of $277 million-to-$281 million, and falling below the consensus of $280.5 million on the top-end. Management is on track to open 35-to-36 restaurants in 2016 and believes Zoe’s has the potential to operate over 1,600 units in the U.S. The number of hedge funds in our database with holdings in Zoe’s Kitchen Inc (NYSE:ZOES) fell by four quarter-over-quarter to nine at the end of June.

On the next page, we’ll find out why Premier Inc, Tuniu Corp, and Kirkland’s are each deep in the red today.