Why Baker Hughes Incorporated (BHI), Fifth Third Bancorp (FITB) and Medivation Inc (MDVN) Are 3 of Today’s Worst Stocks

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Between some encouraging words from Janet Yellen and a surprisingly strong consumer confidence reading for March, it wasn’t too tough for stocks to fight their way out of the red open into the black on Tuesday. When all was said and done, the S&P 500 finished the day up 0.88%, closing at 2055.01.

Why Baker Hughes Incorporated (BHI), Fifth Third Bancorp (FITB) and Medivation Inc (MDVN) Are 3 of Today's Worst StocksNot every name made it out of Tuesday unscathed though. Baker Hughes Incorporated (NYSE:BHI), Fifth Third Bancorp (NASDAQ:FITB) and Medivation Inc (NASDAQ:MDVN) all ended the session with notable losses.

Here’s the deal.

Baker Hughes Incorporated (BHI)

As cued from Yellen’s comments, interest rates as well as the U.S. dollar fell on Tuesday. Normally a weaker dollar translates into rising commodity prices (since most commodities are priced in U.S. dollars). And for most commodities, Tuesday was a bullish day. Gold, for instance, was up more than 1.8%.

The falling dollar wasn’t enough to buoy oil prices though. Crude oil lost another 2.4% of its value today, with traders being still more concerned about the current bearish supply and demand dynamics of crude than they’re impressed by the falling greenback.

Baker Hughes was the day’s biggest loser among large cap oil names, giving up roughly 2.6% of its value. Other high-profile names like National-Oilwell Varco, Inc. (NYSE:NOV) weren’t far behind though. Smaller names like Transocean LTD (NYSE:RIG) were even bigger victims; RIG lost 4.6% of its value on Tuesday.

Fifth Third Bancorp (FITB)

Fifth Third Bancorp may have been the biggest bank to lose more than a little ground on Tuesday, but it was hardly by itself. Regions Financial Corp (NYSE:RF) and Bank of America Corp (NYSE:BAC) also lost some ground, close to the 1.53% tumble FITB took. Banks as a group lost nearly 1.0% of their value today.

The pros for the weakness was “good news” from Federal Reserve chairperson Janet Yellen, who today officially announced the Fed should be cautious with its original 2016 rate-hike plans until there’s more evidence higher interest rates wouldn’t crush the fragile economy right now.

Such a policy ultimately works against banks of all sizes, as they make more money on loans when rates are higher.

Medivation Inc (MDVN)

Last but not least, Medivation shares lost 6% of their value today, not because of anything it did wrong this week, but because it’s in the wrong place at the wrong time. Long story made short, MDVN has become the latest victim of the federal government’s recently-developed effort to reel in prices of drugs.

The (slightly) longer version of the story: U.S. Representatives Lloyd Doggett and Peter Welch along with Senator Bernie Sanders have asked the Department of Health and Human Services and the National Institutes of Health to query Medivation regarding the high price of its prostate cancer drug Xtandi, which can cost more than $129,000 per year.

MDVN investors fear that such a hearing could be a prelude to so-called “march-in rights” that ultimately allow the federal government to seize the drug’s patent and issue licenses to other manufacturers who will make the same drug at a lower price. Such a measure could prove highly destructive to Medivation’s potential Xtandi revenue.

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/2016/03/baker-hughes-incorporated-bhi-fifth-third-bancorp-fitband-medivation-inc-mdvn-are-3-of-todays-worst-stocks/.

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