Why Are These Stocks Among Today’s Losers?

This week’s roller coaster is coming to and end with a bang, as U.S. stocks are deep in the red territory and the Dow is down by triple digits. Biotechnology and trucking stocks are among the biggest losers today and in this article we’ll take a look at the reasons behind their slump. Therefore, let’s find out why SolarCity Corp (NASDAQ:SCTY), Heartland Express, Inc. (NASDAQ:HTLD), Werner Enterprises, Inc. (NASDAQ:WERN), Intercept Pharmaceuticals Inc (NASDAQ:ICPT), and Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) are trending lower this morning.

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Biotechnology stocks are deep in red this morning, dragging down the likes of Intercept Pharmaceuticals Inc (NASDAQ:ICPT) and Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA). Earlier this week, Intercept staged a rally on rumors that the company might be acquired by Shire PLC (ADR) (NASDAQ:SHPG). Whether because interest has cooled off or investors are cashing in on gains, the stock opened 8% lower today. Shares of Ariad Pharmaceuticals are also in the red, despite news that Paris Panayiotopoulos was appointed President and Chief Executive Officer by the company’s board of directors. Panayiotopoulos was elected unanimously and is set to take over from January 1, 2016. He previously headed EMD Serono, Inc., a division of Merck KGaA.

Intercept Pharmaceuticals Inc (NASDAQ:ICPT) lost some of its appeal during the third quarter, as the number of hedge funds invested in the company (among those we track) dropped to 18 from 24 a quarter earlier. Samuel Isaly is betting big on the stock, having pledged nearly 2% of his portfolio to this investment. In its latest 13F filing, Isaly’s Orbimed Advisors reported ownership of 1.12 million shares worth $185 million.

The popularity of Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) has also been sliding over the quarter, with 29 elite funds reporting long positions as of the end of September, down from 31 at the end of June. According to our database, Alex Denner’s Sarissa Capital Management has the largest position in this stock, holding 12.8 million shares valued at $75 million.

With Knight Transportation (NYSE:KNX) lowering its outlook, as we have reported earlier today, all trucking stocks took a hit with Werner Enterprises, Inc. (NASDAQ:WERN) and Heartland Express, Inc. (NASDAQ:HTLD) sliding by around 8% and 4% respectively.

At the end of September, 6.8% of Werner Enterprises, Inc. (NASDAQ:WERN) common stock was held by 14 top funds, down from 17 at the end of June. Chuck Royce and Dmitry Balyasny are both bullish on this stock, holding similar positions in Werner Enterprises. At the end of the quarter, Royce & Associates and Balyasny Asset Management reported ownership of 1.46 million shares and 1.37 million shares, respectively.

Billionaire Ken Fisher holds a significant stake in Heartland Express, Inc. (NASDAQ:HTLD), having slightly trimmed it during the quarter. Fisher Asset Management holds 2.32 million shares worth $46.2 million, according to its latest 13F filing. In general, hedge funds have been shying away from Heartland Express, Inc. (NASDAQ:HTLD), with the total number of hedge fund positions decreasing by seven by the end of the quarter. Approximately 6% of its common stock was held by 12 hedge funds at the end of September.

There has been much talk about SolarCity Corp (NASDAQ:SCTY) and solar stocks in general this week, as the recent tax credit deal has sent them soaring. Today, however, SolarCity did not manage to defy the general trend and shares are down by more than 5% this morning. Notorious short-seller Jim Chanos used this opportunity to remind investors of his bearish position, saying he wishes he had more resources to sell the stock short. Chanos said he sees the SolarCity as a “subprime financing company,” since the company sells most of its solar panels via lease deals. He first announced his bearish bet in August, triggering a massive 39% drop through mid-November. Things quickly turned against Chanos, as SolarCity managed to stage a comeback and is currently up by 22% from when Chanos announced his bearish position.

Although general hedge fund sentiment towards SolarCity Corp (NASDAQ:SCTY) deteriorated during the quarter, key supporters stood their ground and in some cases have even increased their holding of the stock. John Burbank does not share Chanos’ views, having boosted his stake in the company by 30% during the quarter. His fund, Passport Capital, reported in its latest quarterly report a position that amassed 3.68 million shares worth $157 million.

Disclosure: none.