Why Goldcorp Inc. (GG), Shake Shack Inc. (SHAK) and Hewlett-Packard Company (HPQ) Are 3 of Today’s Worst Stocks

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The first day of the shortened trading week got started on quite the bearish foot, with the S&P 500 falling more than a full percentage point to close at 2,104.24 — the biggest loss in three weeks — despite a decent dose of good economic news.

It was even worse for Shake Shack Inc. (NYSE:SHAK), Goldcorp Inc. (NYSE:GG) and Hewlett-Packard Company (NYSE:HPQ). These three names largely led the bearish charge.

Hewlett-Packard (HPQ)

Why Goldcorp Inc. (GG), Shake Shack Inc. (SHAK) and Hewlett-Packard Company (HPQ) Are 3 of Today's Worst StocksFollowing through on Friday’s post-earnings-announcement intraday reversal, Hewlett-Packard Company shares lost almost 4% of their value today.

The bad news was released Thursday afternoon and any fallout was able to be priced into HPQ on Friday. However, having had a weekend to think about it, investors are increasingly unimpressed by the upside of the spinoff to be completed by the end of the current fiscal quarter.

Specifically, the market is seeing less and less benefit in the split after another year of details was offered in the Q2 earnings announcement.

Forbes contributor Adam Hartung may have summed up the concern best by explaining:

“Together there was faint hope for HP.  The company could offer complete solutions. It could work with its distributors and value added resellers to develop unique vertical market solutions. By tweaking the various parts, hardware and software, HP had the possibility of building solutions that could justify premium prices and possibly create growth. But separated, these are now 2 “focused” companies that lack any new innovations, sell commodity products and have insufficient share to matter in markets where share leads to winning developers and enterprise customers.”

Goldcorp (GG)

Just for the record, Goldcorp wasn’t the only gold stock to lose ground today. GG was, however, was the gold name to dole out the most pain to most investors. All told, Goldcorp finished the day down nearly 5%.

The prod for the industry-wide selloff was a steep decline in gold prices, spurred by a sharp rise in the value of the U.S. dollar. Lower gold prices makes gold mining a less profitable business, but weakness in the price of gold is magnified in the subsequent net movement of gold stocks like GG.

The U.S. Dollar Index rallied 1.32% on Tuesday, while gold futures finished the day about 1.35% lower, near $1187 per ounce.

Shake Shack (SHAK)

Last but not least, and calling it like it is, Shake Shack finally paid the price for a hype-inspired, three-month 170% runup today. SHAK shares fell more than 7%, after reaching a nosebleed-high price of $96.75 on Friday.

The stumble from SHAK was widely blamed on Jim Cramer, who likes the Shake Shack growth story, but also called it a cult stock — “Tesla for burgers” was his exact description — causing the market to wonder if it was finally time for the bubble to pop.

That said, it’s not as if the worry isn’t justified. With a trailing price/sales ratio of 9.4 and a forward-looking P/E ratio of 570.5, there’s no real chance SHAK could actually justify its current value at any point in time in the foreseeable future.

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/2015/05/goldcorp-inc-gg-shake-shack-inc-shak-hewlett-packard-company-hpq-3-todays-worst-stocks/.

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