Why Intercept Pharmaceuticals, Wyndham Worldwide and Pitney Bowes Are 3 of Today’s Worst Stocks

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Against a backdrop of a few too many waving red flags already, investors learned this morning another that red flag had been hoisted. Despite higher incomes in December, consumers reeled in their spending. It’s a hint that the masses see trouble in the horizon, which may prompt a self-fulfilling prophecy.

Though the broad market managed to push through the news and leave behind a little-changed day, the same can’t be said for Pitney Bowes Inc. (NYSE:PBI), Intercept Pharmaceuticals Inc. (NASDAQ:ICPT) and Wyndham Worldwide Corporation (NYSE:WYN). These three stocks were among the worst of the worst on Friday, for a variety of reasons.

Pitney Bowes (PBI)

Why Wyndham Worldwide Corporation, Intercept Pharmaceuticals Inc. and Pitney Bowes Inc. Are 3 of Today's Worst StocksBusiness equipment maker Pitney Bowes may have managed to meet earnings estimates. But, when all was said and done, that just wasn’t enough to offset the concern spurred by shortcomings on other fronts.

The good news: Pitney Bowes earned 51 cents per share of PBI stock in the fourth quarter of 2014, after adjusting for one-time times, which was in line with expectations. The bad news: That figure of 51 cents was still less than the 53 cents the company earned in the same quarter a year earlier. The really bad news: Last quarter’s top line of $984 million last quarter was below the year-ago tally of $1.03 billion, and well short of analyst estimates of $1.03 billion.

PBI stock finished the session down more than 7%.

Intercept Pharmaceuticals (ICPT)

All indications suggest Intercept Pharmaceuticals should be, if anything, up quite nicely. ICPT stock was explicitly called a “buy” by Cowen and Company’s Ritu Baral on CNBC on Friday, which is about as much bullish credibility as any small company could hope for.

And it was less than two weeks ago that the company’s investigational product obeticholic acid (OCA) has been granted a “breakthrough” by the FDA as treatment for patients with nonalcoholic steatohepatitis (NASH) with liver fibrosis.

So why then was ICPT stock down 6% on Monday? It’s probably got something to do with a Forbes.com write-up penned and posted by Panos Mourdoukoutas on Friday. In his commentary Mourdoukoutas asks/answers, he points out that ICPT is trading at a steep discount compared to last year’s highs:

“Why such a subdued reaction to such positive news? Perhaps, time has tamed investor expectations, as hype has been replaced by reason.”

Having had a weekend to think about it, the market seems to have seen his point.

Wyndham Worldwide (WYN)

Hotel and timeshare company Wyndham Worldwide saw its stock price drop more than 2% today, bringing the pullback from the high of $88.41 hit on January 23 to a total selloff of 7%.

While the announced acquisition of Dolce Hotels and Resorts may be the reason some investors are pointing to as the cause of the heavy, high-volume selling, it’s more likely the downgrade from Deutsche Bank that did the deed.

Deutsche Bank lowered its price target on WYN stock from $70 to $69, but even worse, explained “We see a host of potential negatives on the horizon for a universally loved stock trading at peak multiples.” The analytical firm then went on to point out stagnation for the industry, rising marketing costs, and the weakening benefit of loan loss reversals for Wyndham Worldwide.

Nothing spooks the market faster than a detailed list of a company’s problems.

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/2015/02/intercept-pharmaceuticals-wyndham-worldwide-pitney-bowes-3-todays-worst-stocks/.

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