What started out as a firmly bullish day for stocks didn’t finish as one. When all was said and done, the S&P 500 whittled down its intraday gain of 1.3% to a mere 0.12% gain — closing at 1951.13 — as investors sought to clean up their portfolios in front of Friday morning’s pivotal employment report for August. Those numbers could largely determine whether or not the Fed raises interest rates this month, or waits until December.
Netflix, Inc. (NASDAQ:NFLX), GoPro Inc (NASDAQ:GPRO) and Joy Global Inc. (NYSE:JOY), however, likely would have lost more than their fair share of ground no matter how well or poorly the market did today. Here’s why.
Netflix (NFLX)
For the second time this week, Netflix has appeared on the daily “Worst 3” list. The reason for Thursday’s setback for NFLX, however, is lingering echoes of the reason for the initial stumble. That is, Apple Inc. (NASDAQ:AAPL) is getting into the content-creation game.
Although its intentions for this interest are not yet perfectly clear, most seem to think it’s a prelude to a service that will in one way or another compete with Netflix, which also makes some of its own most popular programming. House of Cards and Orange Is the New Black, for instance, are a couple of Netflix’s own award-winning shows.
Whether Apple is a true threat or not, today’s 4% pullback from NFLX left it down more than 12% week-to-date.
Joy Global (JOY)
Joy Global shares were crushed on Thursday, giving up 14.6% of their value ultimately thanks to the ongoing demise of commodity prices.
All told, Joy Global earned 54 cents per share on $792.2 million in revenue in its previous quarter. Those numbers both fell short of estimates for a top line of $799.3 million and a bottom line of 60 cents per share of JOY stock. The company now foresees a full-year profit of $1.80 per share on sales of $3.1 billion. Analysts had been looking for an average profit of $2.43 per share of JOY, on revenue of $3.29 billion.
Between the weak numbers, dire outlook and commodity prices that remain at or near long-term lows — with no end in sight — the market couldn’t get rid of the stock fast enough. Joy Global shares are now down 69% since this time last year.
GoPro (GPRO)
Last but not least, GoPro shares lost more than 6% of their value today and are down more than 19% for the week so far, following news that one of its key supply partners dialed back its guidance. Connecting the dots, the market is assuming if the partner is seeing a slow-down, that GPRO is too.
That supply partner, of course, is Ambarella Inc. (NASDAQ:AMBA), which makes the chips that are found inside GoPro wearable cameras.
Although Ambarella topped earnings and revenue estimates for the previous quarter, its growth projection for the current quarter and a vague hint in the company’s comments both imply that demand for the popular GoPro line of action cameras is slowing. If so, that’s clearly bad news for GPRO.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
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