What You Need To Know About These 4 Falling Stocks

At a time when the broader S&P 500 is flat, shares of Progressive Waste Solutions Ltd (USA) (NYSE:BIN), Harley-Davidson Inc (NYSE:HOG), Horizon Pharma PLC (NASDAQ:HZNP), and WhiteWave Foods Co (NYSE:WWAV) are falling in morning trading on negative catalysts. Let’s take a closer look at those catalysts as well as the smart money’s sentiment on these declining stocks.

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Progressive Waste Solutions Ltd (USA) (NYSE:BIN) is off by more than 16% this morning after the company announced disappointing preliminary financial results for the third quarter. For the period, Progressive Waste Solutions Ltd (USA) (NYSE:BIN) expects to report $489 million in revenues and $127 million in adjusted consolidated EBITDA, versus analyst expectations of $495.39 million in revenues and slightly higher EBITDA. In addition to lower-than-expected third quarter EBITDA, management also expects to deliver lower-than-expected yearly EBITDA of $480 million-to-$485 million in 2015, down from the previous guidance of $500 million-to-$515 million. The company missed expectations mainly because of the stronger dollar and higher operating costs. The low commodity prices may have also had something to do with it. From the press release:

The updated outlook also reflects the actions we are taking in our West region as well as a more cautious view of waste volumes in parts of our western Canada operations in the fourth quarter, which has traditionally been a strong period for special waste disposal projects in particular, and which may be affected by the energy-related economic slowdown.

If management controls costs and energy prices recover, Progressive Waste Solutions Ltd (USA) will do well.

Harley-Davidson Inc (NYSE:HOG) is down by 11.7% after its third quarter results missed earnings estimates by $0.09 per share and revenue expectations by $70 million. Motorcycle unit sales fell by 1.4% year-over-year to 72,178 while operating margins for motorcycles fell by 0.4 percentage points to 12.5%. Guidance was soft as well, as the company expects to ship 265,000-to-270,000 motorcycles in 2015, down from previous guidance of 276,000-to-281,000. Full year operating margins are now expected to be 16%-to-17% versus past guidance of 18%-to-19%. Harley-Davidson is a great brand, but it needs to find traction among the younger set to have a bright future. Of the 730 elite funds we track, 27 funds owned $831.79 million of the company’s shares (accounting for 7.10% of the float) on June 30, versus 27 funds and $1.15 billion respectively on March 31. William Von Mueffling‘s Cantillon Capital Management owns 6.08 million shares.

On the next page, we examine why Horizon Pharma PLC and WhiteWave Foods Co are also falling sharply this morning.

Horizon Pharma PLC (NASDAQ:HZNP) is off by 12.6% after the New York Times published an article detailing how Horizon’s Duexis costs $1,500-per-month, yet is just a combination of the generic equivalents of Pepcid and Motrin, which cost no more than $40 and $20-per-month, respectively. The Times article further states that Horizon has increased the price of Duexis by a factor of ten since late 2011 and has done similar things with Vimovo, a similar type of generic combination drug that the company acquired in 2013. Investors are selling the stock because New York Times articles are more likely to draw regulatory scrutiny. Any type of drug price ceiling could send Horizon Pharma’s 10.08 forward P/E higher.

WhiteWave Foods Co (NYSE:WWAV) is down by 7.8% after analysts at Goldman Sachs downgraded the company to ‘Sell’ from ‘Neutral’ and lowered their price target on the stock to $42 from $48, citing slowing organic growth. The analysts think the company will miss organic sales guidance growth by a percent or two over the next few years. The analysts also believe that slowing organic growth will lead to valuation compression.

Hedge funds were mixed on WhiteWave Foods Co (NYSE:WWAV) in the second quarter. Although the number of funds with long positions decreased to 30 from 33, the total value of their holdings in the stock increased to $809.99 million (representing 9.50% of the float), up from $741.67 million.

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