Stocks jumped on December 6 after the release of yet another welcome data point for the Federal Reserve, showing the central bank’s consistent rate hikes in 2023 might finally be working. Latest data shows U.S. private payrolls increased by 103,000 in November, much lower than the estimates of 130,000. Bitcoin also jumped to cross the $44,000 mark as retail investors are starting to pile into the crpyotcurrency on hopes that the upcoming year would bring optimism for the industry on the back of rate cuts and market recovery.
More and more analysts now believe the Fed could start cutting interest rates in 2024. Debate, however, remains on how aggressive these rate cuts could be. Data shows that markets are pricing in at least 100 basis points of interest rate cuts in 2024, beginning the second half of the year. BlackRock recently called these expectations overdone. The firm’s global chief investment strategist Wei Li however said that he does believe rate cuts could be on the way but they won’t be much aggressive”
"Something will have to go seriously wrong for that to come through. So we do think that the Fed will cut rates, probably in the second half of next year, but how many cuts they will deliver will be quite a bit less compared with the old economic cycles, old recessions."
Amid the overall optimism in the market, it’d be interesting to see which stocks hedge funds bought on the dip this year. For this article we scanned Insider Monkey’s database of 910 hedge funds and picked 14 stocks that are down year to date or over the past 12 months but have the highest number of hedge fund investors in our database. Some top names in the list include Merck & Co., Inc. (NYSE:MRK), Chevron Corporation (NYSE:CVX) and Bristol Myers Squibb Company (NYSE:BMY).
Hedge Funds are Betting on These Sliding Stocks
Photo by Ruben Sukatendel on Unsplash
Hedge Funds are Betting on These 14 Sliding Stocks
14. Gaming and Leisure Properties Inc. (NASDAQ:GLPI)
Number of Hedge Fund Holders: 17
Gaming and Leisure Properties Inc. (NASDAQ:GLPI) shares have lost about 6% year to date through December 4.
In November, CBRE Equity Research gave a Buy rating to Gaming and Leisure Properties Inc. (NASDAQ:GLPI) after the company’s Q3 results.
As of the end of the third quarter of 2023, 17 hedge funds tracked by Insider Monkey had stakes in Gaming and Leisure Properties Inc. (NASDAQ:GLPI). The most significant stakeholder of Gaming and Leisure Properties Inc. (NASDAQ:GLPI) was Ken Griffin’s Citadel Investment Group which owns an $117 million stake in the company.
Baron Real Estate Fund made the following comment about Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) in its first quarter 2023 investor letter:
“In the most recent quarter, we significantly reduced our investments in the following companies due to expectations of near-term business headwinds and modest growth prospects, elevated valuations, and our view of superior investment opportunities for other real estate-related companies:
Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) is a triple net REIT that owns a portfolio of 59 geographically diversified casino gaming and related facilities in the U.S.”
ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) was trading in the green as of December 4 but the stock has lost about 50% year to date through December 4. A massive dip in the stock price came in November after ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) posted Q3 results, missing EPS and revenue estimates.
As of the end of the third quarter of 2023, 17 hedge funds reported owning stakes in ZIM Integrated Shipping Services Ltd. (NYSE:ZIM). The most significant stakeholder of ZIM Integrated Shipping Services Ltd. (NYSE:ZIM) was Citadel Investment Group which owns an $18 million stake in the company.
Like ZIM, hedge funds also bought Merck & Co., Inc. (NYSE:MRK), Chevron Corporation (NYSE:CVX) and Bristol Myers Squibb Company (NYSE:BMY) on the dip in 2023.
Environmental solutions company Enviri Corporation (NYSE:NVRI) shares have lost about 13% over the past one year. Enviri Corporation (NYSE:NVRI) ranks 12th in our list of the best sliding stocks to buy according to hedge funds. Last month Enviri Corporation (NYSE:NVRI) posted Q3 results. Adjusted EPS in the period came in at $0.05, beating estimates by $0.09.
As of the end of the third quarter of 2023, 18 hedge funds reported owning stakes in Enviri Corporation (NYSE:NVRI). The most significant stakeholder of Enviri Corporation (NYSE:NVRI) was DE Shaw which had a $21 million stake in the company.
MGP Ingredients Inc. (NASDAQ:MGPI) shares have lost about 13% in 2023 through December 4. Last month MGP Ingredients Inc. (NASDAQ:MGPI) posted Q3 results, beating earnings and revenue estimates. MGP Ingredients Inc. (NASDAQ:MGPI) also upped its 2023 guidance. MGP Ingredients Inc. (NASDAQ:MGPI) now expects sales in the range of $815 million to $835 million vs. the consensus of $827.19 million.
A total of 19 hedge funds out of the 910 hedge funds tracked by Insider Monkey had stakes in MGP Ingredients Inc. (NASDAQ:MGPI).
SouthernSun SMID Cap Strategy made the following comment about MGP Ingredients, Inc. (NASDAQ:MGPI) in its second quarter 2023 investor letter:
“We initiated a position in MGP Ingredients, Inc. (NASDAQ:MGPI) in April of 2023. MGPI is a leading supplier of premium distilled spirits and specialty wheat starches and proteins in the U.S. MGPI operates through three distinct segments, each of which has attractive opportunities for growth. Through its distilling solutions segment, MGPI is a leading supplier of distilled spirits, facilitating the creation of bourbons, rye whiskeys, American single malt whiskey, distilled gins and vodkas. U.S. spirits have gained significant share of total beverage alcohol over the last decade on a revenue basis, and American whiskey volumes, in particular, have experienced strong growth, driven in part by the growth of craft brands. In our opinion, these trends in consumption habits tend to be generational, which suggests that this recent demand strength is sustainable. MGPI maintains a large inventory of distilled spirits of various ages, which is used to produce its own branded spirits and sold to both multinational and craft producers of branded spirits. The time and capital required to age new distillate is significant, and that capital is often better used in marketing new brands, and MGPI is in a unique position to serve this market. As of the end of the first quarter of 2023, the vast majority of MGPI’s new distillate capacity was contracted for both this year and next as well as the majority of its aged distillate for this year.
In addition to its distillation capabilities, MGPI also develops its own branded spirits, and the branded spirits segment provides a platform for both organic and acquisitive growth opportunities. Building individual spirits brands can be challenging, in part due to the three-tier distribution system in the U.S., which requires individual brands to comply with various state laws and state-licensed distributors. In 2021, MGPI acquired Luxco, Inc., which significantly expanded its portfolio of branded spirits and brought with it distribution capabilities across all 50 states. Since acquiring Luxco, MGPI has continued to expand its distilling capacity and increase sales of its premium, super premium and ultra premium brands, which generate higher gross margins than other portfolio brands. In June of 2023, MGPI announced the acquisition of Penelope Bourbon, adding a popular, growing bourbon brand to the portfolio. This transaction is the first tangible example of how we believe management will leverage its national distribution platform and existing distillation capacity to bring other brands into the fold. We expect acquisitions like this one to be a key element of the future value creation opportunity…” (Click here to read the full text)
Marriott Vacations Worldwide Corporation (NYSE:VAC) shares are down about 41% year to date through December 4. Last month Marriott Vacations Worldwide Corporation (NYSE:VAC) posted Q3 results. Adjusted EPS in the quarter came in at $1.20, missing estimates by $0.94.
As of the end of the third quarter of 2023, 21 hedge funds reported owning stakes in Marriott Vacations Worldwide Corporation (NYSE:VAC).
Here is what Baron Funds specifically said about Marriott Vacations Worldwide Corporation (NYSE:VAC):
“Finally, timeshare leader Marriott Vacations Worldwide Corporation (NYSE:VAC)recently increased its outlook for new timeshare sales last month, boosted by very high occupancy, strong tour growth, and sustained spending per owner.”
Ethanol fuel company Green Plains Inc. (NASDAQ:GPRE) shares have lost about 12% in 2023 through December 4. In the third quarter, Green Plains Inc. (NASDAQ:GPRE) unexpectedly swung to a profit. Green Plains Inc. (NASDAQ:GPRE) also said it achieved a new record in production volume and sales for Ultra-High Protein.
As of the end of the third quarter of 2023, 24 hedge funds had stakes in Green Plains Inc. (NASDAQ:GPRE), as per Insider Monkey’s database of 910 hedge funds.
White Brook Capital made the following comment about Green Plains Inc. (NASDAQ:GPRE) in its Q1 2023 investor letter:
“During the quarter, we entered positions in Green Plains Inc. (NASDAQ:GPRE) and in ITV PLC (ITV LN). Green Plains is an ethanol producer undergoing company-specific change by enabling its plants to produce additional products (clean sugar and ultra-high proteins) with the same feedstock -increasing margins and the return on invested capital of the business. This is a common, but Green Plains is amongst the best capitalized to complete the transformation, has unique intellectual property, and is further along in the process than many in the industry. With over 50% of its plants converted to produce clean sugars, and an activist investor now involved, the stock price is unchanged from when I first became interested in Green Plains a year and a half ago.
Crucially, two things have occurred today since I began to consider Green Plains for investment. 1.The Company is further along in its plant transformation. 2.The outlook of the base business has improved…” (Click here to read the full text)
MagnaChip Semiconductor Corporation (NYSE:MX) shares have lost about 28% year to date through December 4. In November MagnaChip Semiconductor Corporation (NYSE:MX) posted third quarter results. Adjusted EPS of MagnaChip Semiconductor Corporation (NYSE:MX) in the period came in at -$0.04, beating estimates by $0.13. Revenue in the quarter fell 14% year over year to $61.2 million, missing estimates by $0.63 million.
As of the end of the third quarter of 2023, 24 out of the 910 hedge funds in Insider Monkey’s database had stakes in MagnaChip Semiconductor Corporation (NYSE:MX).
Florida-based Pacira Biosciences Inc. (NASDAQ:PCRX) shares have lost about 40% over the past one year. In November, Pacira Biosciences Inc. (NASDAQ:PCRX) posted third quarter results. EPS in the period came in at $0.72, missing estimates by $0.06. Revenue fell 2.1% year over year to $163.93 million, missing estimates by $9 million.
A total of 25 hedge funds out of the 910 funds tracked by Insider Monkey were long Pacira Biosciences Inc. (NASDAQ:PCRX) as of the end of the September quarter.
Here is what Carillon Scout Small Cap Fund has to say about Pacira BioSciences, Inc. (NASDAQ:PCRX) in its Q1 2022 investor letter:
“Pacira BioSciences (NASDAQ:PCRX) focuses on non-opioid pain management. In the United States, the company’s EXPAREL is the only opioid-free, long-acting local and regional analgesic approved for infiltration. Pacira BioSciences recently was approved for the pediatric market and now expects this to be a larger opportunity than originally forecast.”
Franco-Nevada Corporation (NYSE:FNV) shares have lost about 18% in value in 2023 through December 4. As of the end of the third quarter of 2023, 27 hedge funds out of the 910 funds tracked by Insider Monkey had stakes in Franco-Nevada Corporation (NYSE:FNV).
Like FNV, hedge funds also like Merck & Co., Inc. (NYSE:MRK), Chevron Corporation (NYSE:CVX) and Bristol Myers Squibb Company (NYSE:BMY).
