Why Stratasys (SSYS), Humana (HUM) and Alibaba (BABA) Are 3 of Today’s Worst Stocks

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Remaining in wishy-washy mode, the market peeled back from Tuesday’s gain with an early move into the red today, only to recover most of its intraday loss when the Federal Reserve unsurprisingly hinted it was in no particular hurry to raise interest rates. Once again, a tepid employment picture and a lack of inflation kept the FOMC content with the status quo on the Fed Funds Rate front. By the time the closing bell rang, the S&P 500 had fallen only 0.4% to close at 2106.

An anemic day would have been preferable compared to the fate suffered by Alibaba Group Holding Ltd (NYSE:BABA), Stratasys, Ltd. (NASDAQ:SSYS) and Humana Inc (NYSE:HUM) though. These three names were some of the days biggest losers. Here’s why.

Stratasys (SSYS)

Why Stratasys, Ltd. (NASDAQ:SSYS), Humana Inc. (NYSE:HUM) and Alibaba Group Holding Ltd (NYSE:BABA) Are 3 of Today's Worst StocksJust a few days after competitor 3D Systems Corporation (NYSE:DDD) did the same for its investors, Stratasys warned shareholders yesterday afternoon that its first quarter numbers wouldn’t be nearly is strong as first thought, sending SSYS stock 22% lower for the session.

As of the latest numbers, the 3D printer company expects to report sales of somewhere between $171 million and $173 million for its first fiscal quarter of the year. Stratasys further said it only expects to post an operating profit of between two cents and four cents per share. Analysts had been expecting a top line of $199 million and earnings per share of 28 cents for the quarter. The revised full-year guidance was equally disappointing.

Canaccord Genuity responded:

“We are substantially reducing our below-consensus estimates following today’s preannouncement for Q1 and lower 2015 outlook. In its press release, management confirmed weak demand in the US, footing with reseller feedback referenced in our downgrade Monday and our April 14th note ‘Slow start in transition year.’ Based on our expectations for slower long-term growth, we believe more estimate cuts could be forthcoming, especially with potentially lower rates of materials consumption on the heels of stalling systems demand.”

Humana (HUM)

Health insurer Humana may have seen its first quarter profits expand. But, it wasn’t enough to satisfy HUM shareholders, who sent HUM stock down to the tune of 7% following the miss.

All told, Humana earned $2.47 per share last quarter on $13.83 billion worth of revenue, easily topping the year-ago bottom line of $2.35 per share, with top-line growth of a little more than 18%. Sales exceeded forecasts of $13.51 billion, but the market couldn’t get past the fact that Humana fell short of the profit of $2.56 per share analysts had been collectively expecting.

Fanning the bearish flames were comments made by CFO Brian Kane, who pointed out that hospital admissions were accelerating in March and April, suggesting costs could continue to rise this year.

Alibaba Group Holding (BABA)

Truth be told, it’s not clear if the news from Alibaba Group Holding is bad for shareholders or not. But, not quite sure what to make of it, investors took a defensive stance and mostly sold BABA. The stock ended with 3% losses by the ring of the closing bell on Wednesday.

So what happened? Well, Alibaba CEO Jack Ma now believes his e-commerce company grew too quickly, so in order to improve the efficiency of the organization, it won’t be hiring anybody until further notice.

It wasn’t an admission that the company is overstaffed or struggling to pay all of its employees and still turn a profit. On the other hand, the fact that Jack Ma made a point of saying this would tacitly suggest to BABA shareholders that the company’s revenue is abnormally low compared to its personnel expenses.

We can only wait and watch with bated breath.

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


Article printed from InvestorPlace Media, https://investorplace.com/2015/04/stratasys-ltd-nasdaqssys-humana-inc-nysehum-alibaba-group-holding-ltd-nysebaba-3-todays-worst-stocks/.

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