Why Wynn Resorts, SAP and Kite Pharma Are 3 of Today’s Worst Stocks

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The first step back from the three-day weekend was an indecisive one for U.S. traders, with a bullish open, a sharp pullback shortly after that, followed by a slow and steady fight back to break-even levels in the latter half of Tuesday’s trading. When all was said and done, the S&P 500 ended the session at 2022.55, up .15%, but pointed lower as the closing bell rang.

WynnResorts185The worst of the worst performers today were Kite Pharma Inc. (KITE), Wynn Resorts, Limited (WYNN) and SAP SE (SAP). Here’s a closer look at what went wrong with each.

Wynn Resorts (WYNN)

As if Wynn Resorts needed an even more of a headwind, as of this past Saturday, Zacks Investment Research now rates WYNN stock as a strong sell. The move comes just days after Deutsche Bank cut its price target for WYNN stock, and less than two weeks after Credit Suisse said subsidiary Wynn Macau could be cutting its dividend soon.

The prompt for the downgrade, of course, is trouble in Macau. The analyst commentary noted:

“After declining in single digits for three consecutive months beginning Jun 2014, revenues declined 11.7%, 23.2%, 19.6%, 30% in September, October, November and December, respectively… The slump reflects a slowdown in Macau as a result of high-stake gamblers curtailing spending amid a cooling Chinese economy.  Also, the nationwide crackdown on corruption in China compelled Macau officials to impose restrictions on high rollers to stop billions of dollars from being siphoned off illegally from mainland China to Macau. Meanwhile, political unrest, a smoking ban on mass market gaming floors and pro-democracy demonstrations in Hong Kong have added to the woes … All these have reduced footfall at Macau casinos, thereby hurting Wynn Resorts’ results.”

WYNN stock fell more than 3% on Tuesday.

SAP SE (SAP)

German software company SAP is struggling to enter the cloud-computing market, and warned this morning that its cloud margins would be crimped through 2017.

Still, many observers — and the company itself — are confident that SAP’s relatively recent entry into cloud computing will eventually yield attractive margins on the heels of significant growth. SAP CFO Luka Mucic noted in the guidance press release:

“We expect cloud subscriptions to exceed software license revenue in 2018. At that time SAP expects to reach a scale in its cloud business that will clear the way for accelerated operating profit expansion.”

Unimpressed investors sent SAP stock lower to the tune of more than 5% following the announcement.

Kite Pharma (KITE)

Don’t look for a reason Kite Pharma shares were off more than 10% on Tuesday — there’s not a clear, specific one to be found. There is a reason, however…

KITE stock fell precipitously today because the weight of the 270% gain between August and last week are simply too much. With all sorts of profit-taking potential on the table after a sizeable 17% stumble last Thursday, the market appears to finally be thinking “enough is enough”, with some traders starting to scale out and lock in their triple-digit wins.

If biopharma trading history is any indication, however, there’s plenty more where that came from.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/01/sap-wynn-resorts-kite-pharma-3-todays-worst-stocks/.

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