Why Are These Five Stocks Collapsing Today?

With the US stock market extending its losses on Tuesday, shares of Twenty-First Century Fox Inc (NASDAQ:FOXA), Viacom, Inc. (NASDAQ:VIAB), Frontier Communications Corp (NASDAQ:FTR), Qualys Inc (NASDAQ:QLYS) and Bristow Group Inc (NYSE:BRS) are among the top losers. Let’s find out why investors might be selling these five stocks today. Aside from the news that sent shares lower, we are also going to assess the hedge fund sentiment towards these stocks.

While there are many metrics that investors can assess in the investment process, hedge fund sentiment is something that is often overlooked. However, hedge funds and other institutional investors allocate significant resources while making their bets and their long-term focus makes them the perfect investors to emulate. This is supported by our research, which determined that following the small-cap stocks that hedge funds are collectively bullish on can help a smaller investor beat the S&P 500 by around 95 basis points per month (see more details here).

First on the list we’ve got Twenty-First Century Fox Inc (NASDAQ:FOXA), whose shares are 2.8% in the red on the back of the company posting its financial results for the second-quarter of its fiscal 2016. For the quarter ended December 31, Twenty-First Century Fox reported a decrease in revenue of 0.5% year-over-year to $7.38 billion, while its profit advanced to $0.44 per share from $0.53 a year earlier.

A total of 56 investors from our database held long positions in Twenty-First Century Fox Inc (NASDAQ:FOXA) at the end of the third quarter, versus 57 funds a quarter earlier and they amassed 16.2% of the float at the end of September. Jeffrey Ubben‘s ValueAct Capital was the largest shareholder with 47.33 million shares, valued at $1.28 billion at the end of September.

Second in our list is Viacom, Inc. (NASDAQ:VIAB), whose shares have declined by 15% after the global media company reported first-quarter EPS of $1.18, in-line with analyst estimates. However, revenue of $3.15 billion was down by 5.7% on the year and missed the estimates by $110 million. The company hasn’t provided any guidance, but investors should notice that the stock has fallen by 48% in the past twelve months.

During the third trimester, Viacom, Inc. (NASDAQ:VIAB) registered a decrease in popularity among the funds that we track, with 35 investors holding long positions at the end of September, versus 47 at the end of June. Among them, Donald Yacktman’s Yacktman Asset Management was the largest shareholder, reporting ownership of 8.31 million shares as of the end of the third quarter.

On the third spot is Frontier Communications Corp (NASDAQ:FTR), whose shares have inched down by 2% today, despite having the approval from the California Public Utilities Commission to acquire Verizon’s operations, including wireline, broadband and video operations. Now with the approval, the deal will be closed at the end of March.

Hedge fund sentiment has also decreased in Frontier Communications Corp (NASDAQ:FTR), as the number of investors long the stock were 33 at the end of the third quarter versus 41 a quarter earlier and they amassed only 8.1% of the float at the end of September. Seth Klarman‘s Baupost Group was the largest shareholder of Frontier Communications Corp (NASDAQ:FTR) in our database, with 13.5 million shares valued at $64.13 million, according to its last 13F filing.

Qualys Inc (NASDAQ:QLYS)’s stock has dropped on 21% after the company posted its financial results, which missed the revenue estimates. For the fourth-quarter, the company posted EPS of $0.21, higher than estimations by $0.04. However, revenue of $44.45 million was up by 21.5% year-over-over, but missed the Street’s expectations by $0.13 million. Furthermore, the firm provided lower-than-expected first-quarter earnings guidance. Management is expecting first-quarter EPS to be in the range of $0.14 to $0.16, and revenue from $44.7 million to $45.4 million, both figures below the $0.18 in earnings per share and $45.9 million in revenues estimated by analysts.

Qualys Inc (NASDAQ:QLYS) gained popularity among the investors that we track in the third quarter. A total of 18 funds held shares of the company on September 30, up by five over the quarter, and they amassed only 5.7% of the float. Among them, Robert Pitts‘ Steadfast Capital Management was the largest shareholder, reporting a position of 358,498 shares in its last 13F filing.

Last but not least, Bristow Group Inc (NYSE:BRS) is 23% in the red today after the firm posted its third-quarter fiscal 2016 results. The company’s EPS amounted to $0.67, beating estimates by $0.04, while the revenue of $419.89 million was down by 8.7% from a year earlier and was $10.93 million lower compared to the consensus estimate.  Also, the company reaffirmed its guidance with management expecting full-fiscal year 2016 earnings to be in the range of $1.80 to $2.40.

During the third quarter, Bristow Group Inc (NYSE:BRS) registered an increase in popularity among the funds we track, with 22 investors holding long positions at the end of September, versus 14 funds a quarter earlier. John W. Rogers‘ Ariel Investments was the largest shareholder of Bristow Group, with 6.89 million shares valued at $180.32 million at the end of September.

Disclosure: None