With nothing bullish in the way of news to latch onto today, and in the shadow of increasingly alarming industrial production data, the bulls were fighting an uphill battle all day. The S&P 500‘s close of 2080.73 was 0.10% below Thursday’s closing level.
It could have been worse though, and for owners of 3D Systems Corporation (NYSE:DDD), Ensco PLC (NYSE:ESV) and Seagate Technology PLC (NASDAQ:STX) it was worse — these three names lost more ground than any other stocks today.
Here’s the deal.
3D Systems Corporation (DDD)
Blame Citigroup for quelling the 114% run-up 3D Systems had dished out between Jan. 30 and yesterday’s close (topped up with a 10% gain from DDD yesterday alone thanks to an upgrade). Believing the stock had come too far, too fast relative to plausible results, the bank’s investment analysis arm downgraded the 3D printing name today.
Analyst Kenneth Wong explained:
“(3D System) shares have nearly tripled since troughing mid-February and have doubled year-to-date, despite (3D printer) market conditions that remain unsettled. We believe the upside scenarios from operational efficiencies upside to take-out potential are overstated.”
The take-out potential Wong mentioned was in reference to rumors that printer giant HP Inc (NYSE:HPQ) was mulling an acquisition of 3D Systems.
The downgrade from “Neutral” to “Sell” sent DDD to a loss of more than 6% for the session.
Ensco PLC (ESV)
With just a quick glance, it would be easy to assume today’s near-10% pullback from Ensco today was the result of the 2.5% decline in oil prices. And, that may well have had something to do with it.
The bulk of the reason ESV lost so much ground on Friday, though, stemmed from the company’s announcement it was going to raise funds by issuing more stock, threatening dilution.
The deep-water drilling company hasn’t escaped the implosion of crude oil prices that has impacted the rest of the energy sector as well. ENSCO PLC is cash-strapped and cash-flow-negative like all the others, and still bleeding money. Issuing 57 million more shares of ESV though — 24% of the current float — wasn’t the fix investors had in mind.
The salt in the wound: The shares to be issued are being sold at $9.25 apiece, well below Thursday’s closing price of $10.59.
Seagate Technology PLC (STX)
Last but not least (and for the third day in a row), disk-drive maker Seagate Technology found its way on the daily “Worst 3” list.
Yesterday’s 20% slide from STX was the result of a revenue warning from the company and a subsequent downgrade.
Today’s 5.6% pullback may have partially been an extension of that weakness. However, the bulk of today’s lull likely stems from an inadvertent dig on Seagate Technology by way of touting alternative memory-maker Micron Technology, Inc. (NASDAQ:MU).
In short, Raymond James analyst Hans Mosesmann says the memory market is changing in such a way that favors Micron Technology but disfavors Seagate. Of course, it’s not as of STX wasn’t an easy target.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
