Why Tesla Motors (TSLA), Cooper Tire & Rubber (CTB) and Sprint (S) Are 3 of Today’s Worst Stocks

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Starting to feel the massive weight of their recent gains — not to mention the headwind inherent with any move into new-high territory — stocks peeled back on Monday. Even so, it’s hardly as if a new downtrend has begun; none of the indices managed to fall below Friday’s lows during today’s session.

That certainly wasn’t the case for Tesla Motors Inc. (NASDAQ:TSLA), Cooper Tire & Rubber Co. (NYSE:CTB) and Sprint Corp. (NYSE:S), however. These three tickers were among Monday’s worst performers. Here’s what investors need to know.

Tesla Motors (TSLA)

Why Tesla Motors Inc., Cooper Tire & Rubber Co. and Sprint Corp. Are 3 of Today's Worst StocksFor a while, it looked like Tesla Motors shares were going to be able to shrug off the ill effect of the chatter regarding an electric car from Apple Inc. (NASDAQ:AAPL), and was even ready to bounce back from their post-earnings stumble two weeks ago.

A lowered target price for the stock, however, upended the budding rally and sent TSLA stock down nearly 5% on Monday.

The lowered price target came from Bank of America/Merrill Lynch, which still  rates TSLA stock as an “underperform” but now thinks shares are only worth $65 rather than the bank’s previous target of $70.

The analyst, John Lovallo, wrote:

“We have long contended that Tesla’s primary challenge is a lack of demand for its [electric vehicles.] Tesla’s management and the bulls consistently argue that the company can stimulate demand at will and that the true issue is capacity and supply. In our view, this optimistic thesis has been largely debunked, given that we now know Tesla is producing at levels that are both well below past run-rates and the company’s current installed capacity.”

Sprint (S)

Just when it looked like the bleeding might finally have stopped for Sprint Corp. shares, the sellers tore into it again today. Monday’s 3% dip from S stock now brings the total loss for the past five trading days to a whopping 11%.

The catalyst for the renewed selling effort? There wasn’t one … at least not a new one. Most realistically, investors got a bit of a wakeup call in the middle of last week when the notion that Sprint might need to raise funds and/or sell assets in order to remain in the price war it’s waging against the likes of AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ).

Morningstar analyst Michael Hodel may have the best grip on the reality owners of S stock are now facing, explaining:

“Sprint has sputtered as promotional activity across the industry has escalated. Dealing with competitive pressure has made the task of improving the network and rebuilding momentum behind the Sprint brand all the more difficult.”

It’s a reality that’s still sinking in.

Cooper Tire & Rubber (CTB)

There’s no way to sugar-coat the facts … Cooper Tire & Rubber just performed miserably last quarter.

When all was said and done, the tire maker turned $819.6 million in sales into an operating profit of 45 cents per share of CTB stock. The top line was stronger than the anticipated figure of $805.5 million, but the per-share bottom line was well shy of the 62 cents analysts had been forecasting.

The culprit for the shortcoming was lackluster foreign demand, which may have been partially caused by unusually strong U.S. dollar, crimping the company’s marketability to foreign customers. Despite the disappointing numbers, Cooper Tire & Rubber CEO Roy Armes remains optimistic about 2015, saying:

“Our goal is to maintain our margins, while recognizing the need to remain competitive. Overall, while we expect that global tire markets will remain highly competitive in 2015, we expect to exceed industry unit volume growth rates in our largest markets for the full year. House brands will be a key contributor to this growth. For the full year, we expect to continue our strong performance in line with our strategic plan.”

CTB stock closed 5% lower on Monday.

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/tesla-motors-tsla-cooper-tire-rubber-ctb-sprint-s-3-todays-worst-stocks/.

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