Why Amazon.com, Inc., Ford Motor Company and Helmerich & Payne, Inc. Are Today’s 3 Worst Stocks

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The stock market finished the week on a strong note Friday, as sunny corporate earnings from blue-chip bellwethers gave investors renewed confidence in the American economy.

amazon com inc ford motor company helmerich payne inc todays worst stockWhile the first half of October was plagued by fears of Europe’s weakening growth prospects and fears of a possible Ebola epidemic, most major stock indices have rebounded sharply from their monthly lows.

Despite today’s bullishness, Amazon.com (AMZN), Ford (F) and Helmerich & Payne (HP) each lost major ground, finishing as three of today’s most notable decliners.

Amazon.com (AMZN)

2014 has been a pretty horrendous year for AMZN stock. Even before today’s precipitous 8.3% fall on Friday, AMZN shares were down more than 20% on the year as investors got fed up with the e-commerce titan’s apathetic view towards margins and net income.

Unfortunately, it was more of the same from Amazon in the third quarter, as the Seattle, Washington-based company posted a record loss. Amazon managed to lose $437 million, or 95 cents per share, in the period despite logging $20.58 billion in sales. Both figures missed Wall Street estimates, which called for an EPS loss of just 74 cents on revenue of $20.84 billion. AMZN took a $170 write-down on its namesake Amazon Fire Phone, and also disappointed with its fourth-quarter revenue guidance.

Consensus estimates called for sales to grow by about 20% during the holiday quarter. Instead, AMZN sees sales growth in the 7% to 18% range. I don’t think the woes are over for AMZN stock.

Ford (F)

It wasn’t just spend-happy Silicon Valley stocks facing pushback from Wall Street on Friday. Ford Motor Company, a longtime staple of American industry, also took a hit. F stock tumbled 4.3% today, succumbing to the same fate General Motors (GM) stock did yesterday on the heels of its own underwhelming earnings report.

Technically speaking, Ford’s third-quarter results didn’t actually disappoint. The Dearborn, Michigan automaker logged sales of $34.9 billion, handily beating the consensus $33.1 billion estimate. Ford also topped earnings estimates, posting EPS of 24 cents against calls for 19 cents. Unfortunately the top- and bottom-line beats weren’t enough to save F stock, as the fundamental trend in both revenue and earnings remained downward-sloping.

Helmerich & Payne (HP)

The last of the big-name decliners was oil and gas driller Helmerich & Payne. HP stock lost 1.8% as crude oil prices continued to fall. Trading as high as $103.66 per barrel just four months ago, crude oil has tumbled more than 20% and stood just north of $81 per barrel in the late afternoon. HP stock’s recent decline has almost exactly mirrored the oil price decline, as HP shares shed just over 20% in the same period of time.

The question most Helmerich & Payne shareholders probably have bouncing around their heads is this: Just how low can oil go? I don’t have the answer to that question, but I think that given reports of declining Saudi Arabian supply and a fairly robust U.S. economy should put a floor on oil prices that isn’t notably lower than current levels.

If and when oil prices stage a comeback, HP stock should recover. Investors also have at least three attractive ETF options to play a rebound in oil prices as well.

As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid.


Article printed from InvestorPlace Media, https://investorplace.com/2014/10/amazon-com-inc-ford-motor-company-helmerich-payne-inc-todays-worst-stock/.

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