These Four Stocks Are Leading Today’s Losers Pack for Various Reasons

Although the market has regained most of the losses from the opening hour, there are some stocks that have remained deep in red. Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Barrett Business Services, Inc. (NASDAQ:BBSI), AMAYA INC (NASDAQ:AYA) and Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) are leading today’s losers’ pack. Let’s review the recent developments that have prompted investors to shy away from these stocks.

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Shares of Valeant Pharmaceuticals Intl Inc (NYSE:VRX) took a hit today, after the company warned investors it expects short term results to be affected by the recent debacle involving Philidor, a mail-order pharmacy chain that helped the Canadian pharmaceutical company to boost sales. Mike Pearson, Chief Excutive Officer of Valeant, said that, although Philidor was responsible for only $190 million or 6.8% of the company’s third quarter revenues, he expects fourth quarter sales to be affected. Valeant has not managed to quantify the effect of the Philidor breakup, but Pearson has promised to offer investors a more meaningful update in December. He is also expecting to replace Philidor within the next 90 days.

One of the most popular stocks among hedge funds, Valeant Pharmaceuticals Intl Inc (NYSE:VRX) could be found in the portfolio of 98 top funds at the end of the second quarter, which together held some 29% of the company’s common stocks. Activist Bill Ackman is a big fan of Valeant, having built over time a stake that amasses 19.4 million shares, while John Paulson followed suit only recently, having boosted his stake by 340% during the second quarter. In its latest 13F filing, Paulson & Co reported ownership of 9 million shares. Needless to say Paulson must bitterly regret the move, following Valeant steep decline in the past three months.

Barrett Business Services, Inc. (NASDAQ:BBSI) tumbled by as much as 35% after news emerged that Johnson & Weaver, LLP, a shareholder rights law firm, is investigating whether Barrett Business Services violated federal law in connection with the company’s recent quarterly financial reports. Moss Adams LLP, a public accounting firm that served as an auditor for Barrett, has sent a letter to the board’s audit committee, stating that the company’s interim consolidated financial statements as of June 30, 2014, cannot be relied upon and has refused to review the company’s 2015 third-quarter results.

According to our database, only 10 elite funds held a stake in Barrett Business Services, Inc. (NASDAQ:BBSI) at the end of June and together had control over just 7.7% of the outstanding stock. At the end of the second quarter, SG Capital Management, run by Ken Grossman and Glen Schneider, reported a 14% reduction in its holding to 268,434 shares, while Israel Englander went even further and dumped more than 80% of his stake, leaving his fund, Millennium Management, with just 20,529 shares of Barrett.

Investors are not happy with AMAYA INC (NASDAQ:AYA)‘s latest financial report, driving the stock lower by as much as 35% so far today. A Canadian provider of products and services for the gaming and entertainment industries, Amaya has posted revenues of CAD 324 ($244) million, up by 8.4% year-over-year, and a profit of CAD 0.44 ($0.33) per share, which is in line with analysts’ expectations. What really drove the stock lower this morning was the revision of its forward guidance. The company has lowered 2015 full year estimates to earnings in the range of CAD 1.66 to CAD 1.75 ($1.25-$1.32) and revenues of CAD 1.29 to CAD 1.34 ($0.97-$1.01) billion. The management has stated that currency swings is the main reason behind this downward revision, while delays in the rollout of upgrades to some of the company’s products are also expected to have an impact on revenues.

Whereas none of the funds we follow were invested in AMAYA INC (NASDAQ:AYA) at the end of March, 19 funds held more than 20% of the common stock at the end of the second quarter. Frank Brosens was among those impressed by the prospects of Amaya, having built a position that amassed 1.06 million shares at the end of June. Kieran Goodwin, the manager of Panning Capital Management, is also bullish, having bought some 1.55 million shares during the second quarter.

Topping the Wall Street’s earnings expectations did not stop Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) from sliding this morning, with the stock currently down by more than 23%. The company registered net sales of $67.3 million, up by 54% compared to the third quarter of 2014, and a loss of $0.34 per share. When adjusted for amortization costs and costs related to mergers and acquisitions, Aegerion actually registered a profit of $0.20 per share. So far this year, the stock has lost more than 54% of its value and is currently trading around the $10 level.

Hedge funds have a significant presence in the Aegerion Pharmaceuticals, Inc. (NASDAQ:AEGR) shareholders’ ranks, as 16 funds held roughly 49% of outstanding shares at the end of June, with their positions valued at $266 million. Scopia Capital, run by Matt Sirovich and Jeremy Mindich, held the largest stake in the company among the funds we follow, having reported ownership of 5.42 million shares in its latest 13F filing. Kevin Kotler is also betting big on Aegerion, with his fund, Broadfin Capital, holding 2.85 million shares at the end of June.

Disclosure: none.