Why Twitter, AMD and 2 Other Stocks Are in the Red Today, While Repros is Surging

It’s profit taking day for many investors, as all three major indexes are modestly lower. In late-afternoon trading, both the Dow and the S&P are off by 0.24%, while the Nasdaq is down by 0.45%.

Among the stocks showing considerably more volatility than the indexes today are Repros Therapeutics Inc (NASDAQ:RPRX), Advanced Micro Devices, Inc. (NASDAQ:AMD), Twitter Inc (NYSE:TWTR), SUPERVALU INC. (NYSE:SVU), and Western Refining Logistics LP (NYSE:WNRL). Let’s analyze the news flow concerning these five companies and check out how hedge funds have positioned themselves in them.

Hedge fund sentiment is an important metric for assessing the long-term profitability. At Insider Monkey, we track over 750 hedge funds, whose quarterly 13F filings we analyze and determine their collective sentiment towards several thousand stocks. However, our research has shown that the best strategy is to follow hedge funds into their small-cap picks. This approach can allow monthly returns of nearly 95 basis points above the market, as we determined through extensive backtests covering the period between 1999 and 2012 (see the details here).

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Nano-cap Repros Therapeutics Inc (NASDAQ:RPRX)‘s shares have surged by 11% after the company announced positive outcomes from a Phase 2 study for Oral Proellex in women with moderate to severe endometriosis. According to the double-blind study of 60 subjects, 70% of subjects treated with Proellex became amenorrheic and the induction of amenorrhea was associated with a substantial reduction in reported pain leading to a subsequent reduction in analgesic use. Due to those results and the observation that treatment with Proellex was generally well tolerated, the company concluded that Proellex subjects’ menstrual pain by BBSS decreased significantly when compared to those treated with a placebo. Repros’ management plans to interact with the FDA to discuss plans for late-stage development of Proellex. Two funds that we track were bullish on Repros Therapeutics Inc (NASDAQ:RPRX) at the end of the second quarter, down by four funds from the end of the previous quarter.

Like the broader indexes that sit just below their all-time highs, Advanced Micro Devices, Inc. (NASDAQ:AMD) is a victim of profit taking today. Given that shares of the semi-conductor company have more than doubled year-to-date, some traders are selling in anticipation of the pricing of Advanced Micro Devices, Inc. (NASDAQ:AMD)’s secondary offering of $600 million in equity and $450 million in convertible senior notes. Given that AMD is itself a volatile stock and the collective sum of the fundraising accounts for almost one-fifth of the company’s current equity valuation, it is understandable why some would want to lock in their gains. Jim Simons‘ Renaissance Technologies raised its stake in AMD by 1,121% to almost 9.7 million shares during the second quarter. Shares of AMD are down by 8.63% today and by 16.77% this week.

On the next page we’ll find out why Twitter Inc, SUPERVALU INC, and Western Refining Logistics are on the move today.

Twitter Inc (NYSE:TWTR) is 6% in the red today after CNBC’s Aditi Roy reported that the company currently has “no bids on the table” in terms of a buyout. The company is instead looking to cut costs further. Twitter Inc (NYSE:TWTR)’s Board is meeting today to discuss its strategy and current situation. Given that Twitter shares have also rallied substantially from their 2016 lows, traders could also be taking profits on the tech company too. 30 funds in our database were long Twitter Inc (NYSE:TWTR) at the end of the second quarter, up by three funds quarter-over-quarter.

Traders bid SUPERVALU INC. (NYSE:SVU) down by 9% after the grocery chain trimmed its full-year adjusted EBITDA outlook. Due to unanticipated softness in the company’s retail and Save-A-Lot segments, its management now expects full-year adjusted EBITDA to be 5% lower than last year’s figure. As with some other stores, SUPERVALU could be a victim of lower government benefits, and consumers upgrading to more upscale stores as the economy moves full speed ahead. 28 funds that we follow were long SUPERVALU INC. (NYSE:SVU) as of the most recent 13F reporting period, unchanged from the prior one.

Western Refining Logistics LP (NYSE:WNRL) is 6.6% in the red today after the company entered into an agreement with Western Refining, Inc. (NYSE:WNR) and an indirect wholly-owned subsidiary of Western Refining to buy certain logistics, storage, and terminalling assets for $195 million in cash and $15 million of Western Refining Logistics’ common units. The company expects to fund the buyout with a public equity offering and a credit revolver. WRL’s management expects the buyout, which should close around September 15, to contribute to the company’s 15% annual distribution growth guidance through 2018. Five funds in Insider Monkey’s database owned shares of Western Refining Logistics LP (NYSE:WNRL) at the end of June, up from just one on March 31.

Disclosure: None