Why Axovant Sciences Ltd (AXON), Oracle Corporation (ORCL) and Rite Aid Corporation (RAD) Are 3 of Today’s Worst Stocks

Advertisement

After having a night to sleep on it (with the help of a little hope regarding Greece’s debt), investors decided what Yellen had to say regarding the U.S. economy was encouraging enough to buy into stocks in a big way. The S&P 500’s 0.99% gain on Thursday led it to a close of 2,121.84.

Why Axovant Sciences Ltd (AXON), Oracle Corporation (ORCL) and Rite Aid Corporation (RAD) Are 3 of Today's Worst StocksIt wasn’t a wildly bullish day for Axovant Sciences Ltd (NYSE:AXON), Oracle Corporation (NYSE:ORCL) and Rite Aid Corporation (NYSE:RAD), however. These three names were among the worst of the worst, for understandable reasons.

Oracle Corporation (ORCL)

The fourth fiscal quarter was anything but impressive for Oracle Corporation. Last quarter, the database (and now cloud computing) icon earned 78 cents per share on $10.7 billion in sales. But analysts were expecting a top line of $10.9 billion, and a profit of 87 cents per share of ORCL.

Fanning the bearish flames was the earning outlook for the current quarter. Oracle expects a profit of somewhere between 56 and 59 cents per share of ORCL, versus a figure of 61 cents analysts had been expecting.

The earnings miss calls into question the value of the cloud-computing market. Though observers widely agree it’s still a young market and also agree all cloud players need more scale to make it a viable business, the transition into a predominantly cloud-based service provider is increasingly looking like it could be a rocky one for Oracle and ORCL owners.

Oracle was down nearly 5% for the session.

Rite Aid Corporation (RAD)

ORCL wasn’t the only stock to get hammered after an earnings report on Thursday. Drug store chain Rite Aid Corporation also dished out some pain. All told, RAD closed nearly 4% lower.

It wasn’t last quarter’s results doing the damage. Rite Aid earned an operating profit of four cents per share, versus analyst expectations for a profit of only two cents per share of RAD, and revenue was up to the tune of 3%.

The outlook for the full year and weak same-store sales were behind the bearish move. Same-store sales growth of only 2.9% fell short of the expected 3.8% increase. And, now Rite Aid only expects to earn between 14 and 22 cents per share this year, down from a projected profit range of between 19 and 27 cents per share of RAD.

Axovant Sciences (AXON)

With today’s 8% dip, Axovant Sciences shares are now officially trading at their lowest price ever. Granted, AXON only went public a week ago, but given that it bolted higher right out of the gate and reached a peak price $31.17 that very same day, the current price of $19.65 has to be alarming.

Not that the stock wasn’t already in a pullback, but the selling avalanche was hastened today by a concerning commentary from Chardan Capital.

Chardan analyst Gbola Amusa explained:

“The market pricing of RVT-101 at IPO to us was highly irrational and suggests underperformance for Axovant. We believe it unlikely Axovant was able to acquire a would-be blockbuster entering phase III trials for just $5 million up front, plus milestones and 12.5% royalties. As a general rule, the more valuable a pipeline asset is, the more a company has to pay up front to obtain it.”

AXON stock is down 36% in its short history.

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

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2015/06/axovant-sciences-ltd-axon-oracle-corporation-orcl-rite-aid-corporation-rad-3-todays-worst-stocks/.

©2024 InvestorPlace Media, LLC