Why Ctrip, Jabil, and Three Other Stocks Are Trading Down Today

Markets were surging on Thursday, with all major U.S. stock indexes trading up at least 0.1%, and oil and gold registering substantial gains. However, a few stocks, including Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), Jabil Circuit, Inc. (NYSE:JBL), Horizon Pharma PLC (NASDAQ:HZNP), Endo International plc – Ordinary Shares (NASDAQ:ENDP), and Guess?, Inc. (NYSE:GES) have registered substantial losses. So, let’s take a look into the events driving these declines, and into what the hedge funds in our database think about the companies involved.

Our research 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).

Let’s start with Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP), whose stock dipped after the opening bell, but has recovered since then and is currently less than 1% in the red. On Wednesday evening, the company posted fourth-quarter earnings of $0.11 per share, $0.05 above consensus, on revenue of RMB2.87 billion ($440 million), up 50.3% year over year, and RMB60 million ($9.27 million) ahead of estimates. However, guidance for the first quarter came in quite light. Management said it expects revenue to grow between 75% and 80%, but this figure would include, for the first time ever, results from the merger with Qunar Cayman Islands Ltd (NASDAQ:QUNR). So, a few analysts decided to break down the number, and came up with 30% to 35% growth for Ctrip. And, while this seems impressive, it still implies a marked deceleration from the company’s recent rates.

Ctrip.com International, Ltd. (ADR) (NASDAQ:CTRP) is trading down about 9.6% year-to-date, having underperformed the market. Among the funds we track, Ken Fisher‘s Fisher Asset Management disclosed ownership of 8.83 million shares of the company, valued at more than $409 million at the end of 2015.

Next up is Jabil Circuit, Inc. (NYSE:JBL), whose shares have declined by around 10% on Thursday, on volume four times above average. The drop comes on the back of financial results for the second fiscal quarter, which included EPS of $0.57, $0.03 below the consensus estimate, on revenue of $4.4 billion, $100 million lower than expected. Guidance for the current quarter was also disappointing and included revenue in the range of $4.1 billion to $4.3 billion and EPS between $0.12 and $0.18, well below consensus estimates of $4.75 billion and $0.51, respectively. CEO Mark Mondello said that “reduced demand in mobility” was behind such weak guidance.

Jabil Circuit, Inc. (NYSE:JBL) lost 14.5% over January, but has recuperated 10.3% since the beginning of February. However, today’s drop takes the year-to-date loss to over 15%. Ron Gutfleish‘s Elm Ridge Capital was one of the investors that avoided the decline as it sold all of its 924,090 shares during the fourth quarter of 2015.

Another stock that has lost ground on Thursday is Horizon Pharma PLC (NASDAQ:HZNP), which is down by around 6%. The main reason behind the drop seemed to be the announcement of a class action lawsuit filed by Glancy Prongay & Murray on behalf of shareholders who purchased shares between March 13, 2014 and February 26, 2016, inclusive. According to a press release, “The complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) Horizon’s Prescriptions Made Easy (“PME”) program was designed to artificially inflate the prices of minor differentiation standard retail drugs; (2) sales revenues from drugs sold through Horizon’s PME program were unsustainable at these inflated price levels; and (3) Horizon’s use of its PME program left the Company subject to increased regulatory risks.” On Wednesday, the Law Office of Vincent Wong announced a similar class action lawsuit.

Bad news aside, and even after today’s tumble, shares of Horizon Pharma PLC (NASDAQ:HZNP) are up almost 13% year-to-date, having widely outperformed the main indexes. One of the largest shareholders is Stephen Mandel‘s Lone Pine Capital, which  15.6 million shares of the small cap biopharmaceutical company – as of February 16.

Endo International plc – Ordinary Shares (NASDAQ:ENDP) is one of the top losers in Thursday intraday session. The company’s stock is down by  13.5% on Thursday, taking this week’s loss to more than 31%. The drop comes on the back of the dip of Valeant Pharmaceuticals Intl Inc (NYSE:VRX)’s stock, since both companies have similar business models.

Among the investors followed by us, Jacob Gottlieb’s Visium Asset Management owns 5.17 million shares of Endo International as of the end of 2015.

Finally, there’s Guess?, Inc. (NYSE:GES), whose shares are down by more than 13%, on the back of financial report for the fourth quarter of fiscal 2016. The small-cap retailer reported earnings of $0.57 per share, which fell $0.01 short of expectations, on revenue of $658.3 million, which beat estimates by $0.71 million. For the current quarter, the company forecasts EPS in the range of $0.65 to $0.85, substantially below the Street’s consensus of $1.05. Management explained that they were modeling a $0.11 hit on EPS from currency headwinds.

Taking into account today’s tumble, shares of Guess?, Inc. (NYSE:GES) are down by 2% since the beginning of the year, having performed slightly worse than the wider market. One of the shareholders of Guess is Joel Greenblatt‘s Gotham Asset Management, which disclosed ownership of 1.64 million shares of the company in its last 13F filing. 

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.