It took a while to get the ball rolling, but once the bulls got moving on Thursday, they didn’t look back. The S&P 500’s close of 2,121.10 today was 1.08% better than Wednesday’s closing level, and was technically the highest close the index has ever seen … even if just by a couple of points.
Despite the marketwide bullishness, Thursday was a rather miserable day for owners of Vipshop Holdings Ltd (NYSE:VIPS), Kohl’s Corporation (NYSE:KSS) and Puma Biotechnology Inc. (NYSE:PBYI). These three names were among the worst of the worst performers.
Vipshop Holdings (VIPS)
By almost all accounts, shares of Chinese online-retailer Vipshop Holdings should be soaring.
Last quarter’s revenue of $1.4 billion doubled the year-ago revenue total and handily topped expectations of $1.29 billion. The company earned 13 cents per share of VIPS vs. expectations of only 10 cents. And the company’s guidance of revenue growth of between 71% and 75% for the current quarter is both impressive and likely conservative.
So why were VIPS shares down a sizable 5% on Thursday against a backdrop of good news? Most likely because an admitted short-seller’s allegations of misleading accounting statements are starting to resonate with investors, possibly because Vipshop Holdings made a point of publicly calling them unfounded.
The allegations were posted at Seeking Alpha by research outfit Mithra Forensic Research, which claimed “forensic models suggest that the firm [Vipshop Holdings] has manipulated sales, receivables, profit and other asset accounts.”
Whether the claims are true or not are largely irrelevant. The mere implication is enough to cast a near-term shadow of doubt on VIPS.
Puma Biotechnology (PBYI)
As it turns out, neratinib — a drug being tested by Puma Biotechnology as a treatment for breast cancer — may not be as effective as first presumed.
Then again, maybe it is.
Therein lies the touble — it’s not clear what the company’s representatives were trying to say on Wednesday evening at this year’s American Society of Clinical Oncology conference when the more recent results of the neratinib were presented, which is largely why PBYI tanked to the tune of more than 18% on Thursday … the market is widely adopting a “better safe than sorry” mentality with PBYI.
Cowen analyst Eric Schmidt summed up the problem about as clearly and concisely as anyone, explaining:
“Given prior comments from PBYI, investors had expectation of at least a 3% absolute benefit, and perhaps a benefit as high as 4-5%. Given neratinib is associated with significant tolerability issues, some consultants have commented that they would like to see at least 3-4 women cured per 100 treated. Hence the 2.3% figure could lead to lower penetration in the marketplace.”
Kohl’s (KSS)
There’s no denying department store company Kohl’s fell short or revenue estimates as well as came up short of same-store sales expectations. But, trades may have been unnecessary merciless, sending KSS down more than 13% on the news.
The good news: Kohl’s pumped up its top and bottom line in the first quarter of 2015, earning 63 cents per share on $4.12 billion in revenue. Sales grew 1.3% on a year-over-year basis, as the company only earned 60 cents in the first quarter of 2014. Analysts were only looking for a profit of 55 cents per share of KSS this time around.
The bad news: Those same analysts were expecting a top line of $4.19 billion and a same-store sales increase of 2.6%. The company’s same-store sales only improved 1.3%, leaving much to be desired in the way of sales growth.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
