Why Urban Outfitters Inc., Transocean Ltd, and Netflix, Inc. Are Today’s 3 Worst Stocks

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The stock market rallied into the weekend on Friday as European stocks recovered, China threw some cash at its major banks, and housing starts in September increased 6.3% higher from August.

urbn stock rig stock nflx stock todayDespite the abundance of good news, shares of Urban Outfitters (URBN), Transocean (RIG) and Netflix (NFLX) each fell sharply, ending as three of the market’s most notable laggards.

Urban Outfitters (URBN)

Shares of Urban Outfitters took a brutal beating on Friday, as URBN stock plunged 14.3%. The clothing retailer warned investors that slumping same-store sales that it saw in September are continuing in October. With the holiday shopping season nearly upon us, URBN stock — which has already lost more than 20% in 2014 — could continue slumping as consumers opt for other clothiers.

URBN made a high-profile mistake last month that probably isn’t helping its popularity with the public. It decided to sell a Kent State University sweatshirt with what seemed to be fake bloodstains on it, which for many elicited instant associations with the tragic Kent State massacre of 1970. Then, Urban Outfitters denied it had intentionally, implicitly referenced the shootings.

It was a horrible PR move, and today, URBN is a horrible stock. If it keeps marketing products like the Kent State sweatshirt, I doubt URBN will remain relevant for long.

Transocean (RIG)

Offshore oil driller Transocean was off another 4.5% today, suffering continued fallout from rapidly falling oil prices (though Friday’s oil price action was relatively stable), as well as an analyst downgrade.

Crude oil, at around $83 per barrel, is off more than 20% from its 52-week high. But RIG stock also was downgraded today by Cowen & Company from “outperform” to “market perform,” moving the price target from $39 per share to $30 per share.

Netflix (NFLX)

And finally, shares of streaming video provider Netflix finished as a loser for the second consecutive day on Friday, shedding 1.3%. NFLX shares cratered Thursday; Wall Street erased nearly 20% of the company’s market capitalization in a single trading session after the company’s subscriber growth severely disappointed. As if that weren’t enough, HBO announced it was entering the a la carte streaming business, and NFLX issued a profit warning.

It’s hard to imagine a worse combination of events for Netflix. That said, at least NFLX has a shark in its corner. Shark Tank star and Dallas Mavericks owner Mark Cuban tweeted that he was buying NFLX stock today, citing the fact that its market cap is $10 billion less than Twitter (TWTR) as one reason the company could be acquired in the future.

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/urban-outfitters-inc-transocean-ltd-netflix-inc-todays-worst-stock/.

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