These Stocks Are Not Winning Today: Rewalk Robotics, Theravance Biopharma, Community Health Systems and More

Although the broader markets are in the green, shares of Rewalk Robotics Ltd (NASDAQ:RWLK), Theravance Biopharma Inc (NASDAQ:TBPH), AK Steel Holding Corporation (NYSE:AKS), Groupon Inc (NASDAQ:GRPN), and Community Health Systems (NYSE:CYH) are deep in the red this morning.

In this article, we’ll find out why traders are selling off the five stocks today and use 13F filings to determine how the smart money tracked by our team has been positioning themselves in them.

Our research determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor to beat the S&P 500 by around 95 basis points per month (see the details).

Rewalk Robotics Ltd (NASDAQ:RWLK) shares have plunged by 25.28% after the company announced a secondary offering of 3.25 million units at $3.75 per unit. Each unit consists of one ordinary share of the company, and 0.75 of a warrant to buy one ordinary share with an exercise price of $4.75. In addition, ReWalk has granted Oppenheimer & Co a 30-day option to buy an additional 487,500 units. The company intends to use the net proceeds from the offering for general corporate purposes. Only one of the funds that we track owned shares of Rewalk Robotics Ltd (NASDAQ:RWLK) at the end of June, that being D E Shaw (35,402 shares).

Theravance Biopharma Inc (NASDAQ:TBPH) is 14% in the red after the biotech company announced a proposed public offering of $100 million of ordinary shares and another offering of $150 million of convertible senior notes due 2023. The company also intends to grant underwriters a 30-day option to buy up to an additional $15 million in ordinary shares and up to $22.5 million principal amount of additional notes. The exact pricing of the two offerings was not disclosed during the initial press release. Of the 749 hedge funds that we track which filed 13Fs for the June quarter, 12 funds owned $433.56 million worth of Theravance Biopharma Inc (NASDAQ:TBPH) shares on June 30, which accounted for 40.30% of the float and was up from nine funds with $298.66 million in holdings on March 31.

On the next page we’ll examine why traders are selling off Groupon, AK Steel, and Community Health Systems this morning.

Although it bought out its competitor LivingSocial for a “not material” consideration, Groupon Inc (NASDAQ:GRPN) has fallen by 16% due to its third quarter earnings report. While Groupon’s loss of $0.01 per share beat Wall Street’s estimates by a penny and its revenue of $720.47 million beat estimates by $10 million, the market was clearly expecting more than analysts, as Groupon’s results clearly failed to meet the market’s expectations. Some traders also didn’t like the fact that gross billings dropped by 2% due to various country exits. In terms of guidance, Groupon expects 2016 EBITDA of $150 million-to-$165 million on revenue of $3.075 billion-to-$3.15 billion. The number of funds in our system owning positions in Groupon Inc (NASDAQ:GRPN) rose by five quarter-over-quarter to 23 at the end of June.

AK Steel Holding Corporation (NYSE:AKS) is almost 10% lower after the company announced the offering of 65 million shares of common stock at $4.90 apiece. In connection with the offering, AK Steel has also granted underwriters a 30-day option to buy up to a further 9.75 million shares. AK Steel intends to use the money to repay outstanding borrowings under its revolving credit facility and for general corporate purposes. 32 funds in our system had a long position in AK Steel Holding Corporation (NYSE:AKS) at the end of the second quarter, up by 15 funds from the end of the first quarter.

Community Health Systems (NYSE:CYH) is 38% in the red after the company reported disappointing preliminary financial results for the third quarter. For the three months ended September 30, Community Health anticipates a loss from continuing operations before taxes as reported of $83 million and adjusted EBITDA of $465 million on revenue of $4.38 billion. That translates to a loss of $0.69 per diluted share and a loss of $0.35 per share when excluding certain items. Those figures are in stark contrast to Wall Street’s expectations of earnings of $0.32 per share. The poor performance was due to lower volumes, as total admissions fell by 12.4% year-over-year, as well as larger-than-anticipated reductions in terms of various reimbursements, and the lack of solid expense reduction control. In terms of guidance, the company now anticipates adjusted EBITDA of between $2.2 billion and $2.275 billion for the full year, down from the previous guidance range of between $2.4 billion and $2.55 billion. 33 funds that we track were long Community Health Systems (NYSE:CYH) at the end of the second quarter, down by nine funds quarter-over-quarter.

Disclosure: None