Why Facebook (FB), Gilead Sciences (GILD) and Newmont Mining (NEM) Are Today’s 3 Worst Stocks

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The stock market anxiously awaited commentary from the Federal Reserve on Wednesday, trading sideways up until the central bank’s announcement at 2 p.m. The Fed decided to end the quantitative easing program that began in September 2012; Wall Street responded by sending stocks broadly lower.

facebook inc gilead sciences inc newmont mining corp todays worst stockFacebook (FB), Gilead Sciences (GILD), and Newmont Mining (NEM) each ended deeply in the red, finishing as three of the day’s worst mainstream stocks.

Facebook Inc. (FB)

FB stock took a nasty tumble today, shedding 6.1% after Tuesday evening’s third-quarter earnings report. From the surface-level results, you’d think FB shares would rocket higher. As InvestorPlace’s Dan Burrows explains:

“Earnings nearly doubled to $806 million, or 30 cents a share, from $425 million, or 17 cents a share last year. And on an adjusted basis, FB earnings beat Street estimates by 3 cents a share, which is more-than-decent upside surprise.”

And if earnings were the only thing that mattered, FB stock would have been fine. Burrows goes on to narrate the downfall of Facebook’s report:

“Revenue, however, only matched analysts’ average forecast, and the outlook was even more disappointing. For the current quarter, FB sees the top line growing to $3.62 billion to $3.8 billion, vs. the consensus estimate of $3.73 billion.”

The real doozy was Facebook’s projected costs, which the social network sees rising by between 55% and 75% in fiscal 2015. To add insult to injury, FB is booking $15.3 billion in goodwill for its $22 billion WhatsApp acquisition, an accounting move that could forebode steep write-offs in the future.

Gilead Sciences, Inc. (GILD)

Gilead Sciences stock shed 2.4% today after its third-quarter report. GILD stock slipped after the biotech reported weak sales of its flagship product, hepatitis C drug Sovaldi. Sovaldi sales fell steeply from the prior quarter, slumping from $3.5 billion to $2.8 billion globally.

Partially due to Sovaldi’s softness, GILD earnings came in below expectations, posting earnings per share of $1.84 — 9 cents less than consensus estimates. Investors should put things in perspective, though: Even after today’s loss, GILD stock is up a whopping 45% year-to-date on the general success of Sovaldi, which is doing extremely well in the grand scheme of things.

Newmont Mining (NEM)

Lastly, shares of gold, copper, and silver miner Newmont Mining fell 4.8% on Wednesday, with the vast majority of its decline coming in the two hours after the Federal Reserve meeting. The price of NEM stock, as one would expect, is woefully dependent on the price of the commodities the company sells. With gold prices off more than 14% from 52-week highs, NEM stock is down more than 9% year-to-date after today’s decline.

Gold is traditionally a hedge for a less powerful dollar, and with the dollar strengthening and our central bank no longer printing money like crazy, there were no imminent signs of the U.S. dollar’s collapse on Wednesday.

As of this writing John Divine held no positions in any of the stocks mentioned. You can follow him on Twitter at @divinebizkid.


Article printed from InvestorPlace Media, https://investorplace.com/2014/10/facebook-inc-gilead-sciences-inc-newmont-mining-corp-todays-worst-stock/.

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