What is Going on With These Falling Stocks?

It’s profit-taking day as all three major indexes are lower. Crude futures are also moderately lower as traders await OPEC and Russia’s decision whether to freeze or not to freeze next week.

Among the stocks underperforming the broader market today are salesforce.com, inc. (NYSE:CRM), Enphase Energy Inc (NASDAQ:ENPH), Catabasis Pharmaceuticals Inc (NASDAQ:CATB), Oshkosh Corp (NYSE:OSK), and Wix.Com Ltd (NASDAQ:WIX). In this article, we will find out why each stock is lower and will see what the investors we track at Insider Monkey

At Insider Monkey, we track around 740 hedge funds and institutional investors. Through extensive backtests, we have determined that imitating some of the stocks that these investors are collectively bullish on, can help retail investors generate double digits of alpha per year. The key is to focus on the small-cap picks of these funds, which are usually less followed by the broader market and allow for larger price inefficiencies (see the details here).

salesforce.com, inc. (NYSE:CRM) shares are off by 3.3% after rumors surfaced that the company might be interested in buying Twitter Inc (NYSE:TWTR). salesforce.com was in the bidding for LinkedIn Corp (NYSE:LNKD) earlier but was outbid by Microsoft Corporation (NASDAQ:MSFT). Fuel was added to the fire when Vala Afshar, Salesforce’s Chief Digital Evangelist tweeted out the following: “Why @twitter? 1 personal learning network 2 the best realtime, context rich news 3 democratize intelligence 4 great place to promote others” Of the around 749 funds that we track, 60 were long shares of salesforce.com, inc. (NYSE:CRM) at the end of June, down by three funds from the previous quarter.

Enphase Energy Inc (NASDAQ:ENPH)’s stock is down by over 25% after the company announced that it intends to offer and sell a currently-unspecified amount of shares of its common stock. The company’s management also announced restructuring and cost-saving initiatives that will help the company to save around $20 million a year. Enphase Energy Inc (NASDAQ:ENPH) reaffirmed third-quarter sales guidance of $87 million to $93 million, which neatly encompasses the average analyst estimate of $89 million. Enphase also expects fourth-quarter sales of $90 million to $100 million. Seven funds tracked by Insider Monkey owned $13.2 million worth of Enphase Energy Inc (NASDAQ:ENPH)’s stock, which accounted for 14.20% of the float at the end of June, versus six funds and $17.97 million, respectively, a quarter earlier.

On the next page, we examine why Catabasis Pharmaceuticals, Oshkosh Corp, and WixCom Ltd are each lower.
Catabasis Pharmaceuticals Inc (NASDAQ:CATB)’s shares have slid by 15% on the back of the company announcing that it has priced the offering of 2.5 million shares at $4 a piece. The company will use the net proceeds to fund ongoing and planned clinical trials of edasalonexent (CAT-1004), R&D for other potential drugs, and general corporate purposes, among other activities. Only three funds from our database had a bullish position in Catabasis Pharmaceuticals Inc (NASDAQ:CATB) at the end of the second quarter, unchanged from the previous quarter.

Oshkosh Corp (NYSE:OSK) is 6% in the red after the company (on its analyst day) raised its full fiscal 2016 adjusted EPS guidance to $2.85-$3 from the previous $2.60-$2.8. Oshkosh also raised the corresponding revenue guidance to $6.1-$6.2 billion from the previous $6-$6.1 billion. Although that is better than expected by analysts, shares are down in part because the company expects an EPS impact of $0.23 in fiscal 2016 for restructuring charges. Oshkosh Corp (NYSE:OSK)’s fiscal 2017 revenue guidance of $6.5-$6.7 billion is not that impressive, when compared to the average estimate of $6.66 billion. The smart money became a little bit more optimistic on Oshkosh Corp in the second quarter. The number of investors tracked by us with holdings in Oshkosh Corp (NYSE:OSK) rose by six quarter-over-quarter to 16 at the end of June.

Wix.Com Ltd (NASDAQ:WIX) has fallen by around 5% after RBC Capital downgraded the stock to ‘Sector Perform’ from ‘Outperform’ mainly for valuation reasons. Shares of Wix.Com have almost doubled year-to-date. The analysts have a $45 price target on the stock. At the end of the second quarter, 19 investors from our database owned shares of Wix.Com Ltd (NASDAQ:WIX), compared to 13 funds at the end of March.

Disclosure: none