Why Traders Are Selling These Five Tanking Stocks?

All three major indexes are in the red on Wednesday after Apple Inc. (NASDAQ:AAPL) reported a disappointing quarter. Among the stocks that are deep-in-the-red along with Apple are MannKind Corporation (NASDAQ:MNKD), Intrexon Corp (NYSE:XON), Dynavax Technologies Corporation (NASDAQ:DVAX), Goodyear Tire & Rubber Co (NASDAQ:GT), and Blackhawk Network Holdings Inc (NASDAQ:HAWK). In this article, we find out why traders have sold each stock and analyze how the smart money is positioned towards them.

While there are many metrics that investors can assess in the investment process, the 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 to beat the S&P 500 by around 95 basis points per month (see the details here).

MannKind Down on At Market Issuance Sales Agreement

MannKind Corporation (NASDAQ:MNKD) is 6% lower today after the company entered into an at the market issuance sales agreement with FBR Capital Markets yesterday that allowed MannKind to issue and sell shares of its common stock with an aggregate offering value of up to $50 million. MannKind will pay FBR 3% of the gross proceeds of the sales price per share of common stock sold through FBR. The company will also pay up to $25,000 in other fees. A total of 11 out of the 786 elite funds that we track owned shares of MannKind Corporation (NASDAQ:MNKD) at the end of the fourth quarter.

Intrexon Lower on Short-Seller Report

After publishing a scathing article over the company last week, the research firm/short-seller Spotlight Research published parts 2-8 of its expose on Intrexon Corp (NYSE:XON) on Wednesday. Among the many things Spotlight Research noted is the fact that the author thinks that ‘revenues may be overstated by ~50% through transactions with related parties’ and that ‘biofuels are a pipe dream’. Shares of Intrexon are down 6.5% on back of the report. The number of investors holding shares of Intrexon Corp (NYSE:XON)  among those that we track rose by two quarter-over-quarter to 19 during the last quarter of 2015.

On the next page, we will take a closer look at the developments that sent lower shares of Dynavax Technologies Corporation, Goodyear Tire & Rubber Co, and Blackhawk Network Holdings.

Dynavax Down Following FDA Delay

Dynavax Technologies Corporation (NASDAQ:DVAX)’s shares have retreated by 13% after the US Food & Drug Administration notified the company that it will require additional time to review the Biologics License Application for Dynavax’s investigational vaccine for immunization of adults against hepatitis B infection, HEPLISAV-B. The FDA has extended the vaccine’s PDUFA date by three months to December 15, 2016 to review the additional individual trial data sets that Dynavax submitted at the FDA’s request on April 8. Of the around 800 funds we track, 31 funds owned $292.88 million worth of Dynavax Technologies Corporation (NASDAQ:DVAX)’s shares, which accounted for 31.60% of the float on December 31, versus 32 funds holding $348.18 million worth of stock a quarter earlier.

Goodyear Tire & Rubber Stock Falls on Mixed Results

Goodyear Tire & Rubber Co (NASDAQ:GT) is 8.2% in the red after the company reported mixed first-quarter results. Although the company’s EPS of $0.72 beat the estimates by $0.01, Goodyear’s sales of $3.7 billion were $220 million lower than expected. Sales dropped 8% year-over-year, led by the company’s North America segment, which saw the revenue fall by an annual 13%. However, Goodyear Tire & Rubber reaffirmed its 2016 financial targets, which include core segment operating income growth between 10% and 15% excluding Venezuela and an adjusted debt-to-EBITDAP ratio in the range of 2x to 2.1x at the end of the year. David Tepper’s Appaloosa Management LP cut its holding in Goodyear Tire & Rubber Co (NASDAQ:GT) by almost two thirds to slightly over 2.1 million shares during the fourth quarter of 2015.

Blackhawk Falls Following Earnings Report

Blackhawk Network Holdings Inc (NASDAQ:HAWK) reported earnings of $0.46 per share on sales of $184.6 million for its first quarter, beating the bottom-line estimates by $0.14 but missing the top-line by $13.37 million. Although adjusted operating revenues rose by 23% year-over-year and adjusted net income inched up by an annual 8%, investors weren’t impressed and sent the stock down 10.5%. Blackhawk Network Holdings expects 2016 adjusted EPS in the range of $2.44 to $2.63 and adjusted operating revenue between $932 million and $1.0 billion. The management also anticipated adjusted EBITDA in the range of $196 million to $216 million.

A total of 26 funds from our database amassed 10.6% of Blackhawk Network Holdings Inc (NASDAQ:HAWK)’s stock at the end of December.

Disclosure: none