Why These 5 Stocks Are Among Today’s Biggest Losers

U.S stocks are trading lower today, after the latest tumble in oil prices has put further pressure on the markets. Weak quarterly results have also conspired to drag the major indices lower, with the Dow down by triple digits. In this article we’ll take a look at some of today’s biggest losers, which are BP plc (ADR) (NYSE:BP), Carnival Corp (NYSE:CCL), Royal Caribbean Cruises Ltd (NYSE:RCL), Rent-A-Center Inc (NASDAQ:RCII), and Integrated Device Technology Inc (NASDAQ:IDTI). We’ll also check in on how elite money managers were trading these stocks recently.

Imitating hedge funds and other institutional investors can help identify some of the most profitable stocks on the market. However, our extensive research that covered the period between 1999 and 2012, showed that the best approach is to follow these investors into their small-cap stocks. Our backtests showed that the 15 most popular small-cap stocks among hedge funds managed to generate a monthly alpha of 81 basis points, versus an alpha of 0.7 percentage points posted by their top 50 large-cap picks (see more details here).

BP plc (ADR) (NYSE:BP) shares are in the red after the oil giant missed estimates with its fourth quarter financial results. Pair up massive write downs and restructuring charges with a severe slump in oil prices and you get a perfect recipe for a massive quarterly loss. In the case of BP, that loss was $2.2 billion, as the underlying replacement cost profit plummeted by 91% to just $196 million. Revenue fell by roughly 35% to $49.2 billion, while adjusted earnings per American Depository Share of $0.06 missed analysts’ estimates of $0.17 per share. The stock is currently trading down by more than 8% from yesterday’s closing price.

At the end of the third quarter, 35 of the funds we follow reported a long position in BP plc (ADR) (NYSE:BP), up from 33 a quarter earlier. Israel Englander made a big play on this stock during the quarter, initiating a position that amassed 3.83 million shares of BP by the end of September.

Carnival Corp (NYSE:CCL) shares are trending lower today after the company announced that it intends to sell the shares of Carnival plc (ADR) (NYSE:CUK) that it holds in the United Kingdom. Approximately 27 million shares will be sold on the open market when U.S shares are trading at a discount to their comparable price in the U.K, with the proceeds being used to repurchase Carnival Corporation common stock in the U.S, a process known as Stock Swap Repurchase. Any remaining net proceedings will be used for general corporate purposes according to a press release. U.S shares fell by as much as 9.3% during the first hours of trading today.

Ken Griffin is bullish on Carnival Corp (NYSE:CCL), having increased his stake by 25% during the third quarter. According to its latest 13F filing, Citadel Investment Group holds 4.12 million shares of Carnival.

Royal Caribbean Cruises Ltd (NYSE:RCL) took a nosedive this morning, with the strong dollar having squeezed fourth quarter profits. The cruise operator posted a net profit of $206.8 million, which translates into $0.94 per share, beating estimates of $0.92 per share. Revenue however came in at $1.9 billion, falling short of analysts’ estimates of $1.95 billion. The results registered a significant reaction, with the stock dropping by as much as 18% and now trading down by about 16.5% on the day.

Approximately 6% of Royal Caribbean Cruises Ltd (NYSE:RCL)’s common stock was held by 41 top hedge funds at the end of September, down from 43 at the end of June. Donald Chiboucis is still bullish on this stock, having increased his stake by 9% during the third quarter. His fund, Columbus Circle Investors, holds 2.1 million shares as of September 30.

We dive into two more of the day’s big losers on the next page.

Rent-A-Center Inc (NASDAQ:RCII)‘s fourth quarter results were not impressive either, with the stock plummeting by 25% in the first hours of trading. The company swung to a loss, following a $1.17 billion goodwill impairment charge. Rent-A-Center reported revenue of $793.8 million for the quarter, below expectations of $811.8 million, while adjusted earnings stood at $0.54 per share, above analysts’ estimates of $0.52 per share. The stock was already down by 11% for the year coming into today’s session and has now lost 34% year-to-date.

Our latest figures show that 3.7% of the elite funds in our system, 27 in all, are invested in Rent-A-Center Inc (NASDAQ:RCII) and together they hold some 19% of the company’s common stock. Phill Gross and Robert Atchinson‘s Adage Capital Management holds the largest stake in the company among the funds that we follow, amounting to 2.46 million shares, up by 2% over the third quarter.

Shares of Integrated Device Technology Inc (NASDAQ:IDTI) are down by 26% after its fiscal year 2016 third quarter results failed to impress market participants. The company reported a net profit of $32.5 million or $0.35 per share when adjusted for one-time gains and costs, in-line with analysts’ expectations. While analysts were looking for $177.9 million in revenue, Integrated Device Technology missed the estimate by a fraction, having reported revenue of $177.6 million. Although the results were more or less in-line with expectations, analysts at Bank of America/Merrill Lynch said the company is set for slower growth and downgraded the stock to ‘Neutral’ from the previous rating of ‘Buy’.

The Integrated Device Technology Inc (NASDAQ:IDTI) fan club lost some of its members during the third quarter, as the number of hedge funds betting on the stock dropped to 36, from 43 at the end of the previous quarter. Ken Griffin initiated a new position during the quarter, amassing 4.11 million shares, which made Citadel the largest holder of Integrated Device Technology shares among the funds in our database.

Disclosure: None