Traders may have been hesitant to plow into the market on Friday, but a new week brought rekindled confidence with it. Even without the help of any major economic news (and despite a mixed message from Fed Chairperson Janet Yellen), the S&P 500 mustered a gain of 0.49% today, closing at 2109.41.
Not every name jumped on the rally bandwagon, though. Best Buy Co Inc (NYSE:BBY), AbbVie Inc (NYSE:ABBV) and Smith & Wesson Holding Corp (NASDAQ:SWHC) were all left behind. Here’s what went wrong for each.
AbbVie Inc (ABBV)
How does the old saying go? You pay your money, you take your chances? That’s what pharmaceutical company AbbVie did in April, and now, ABBV owners are wishing the company hadn’t.
At this year’s annual American Society for Clinical Oncology (ASCO) conference, AbbVie delivered disappointing news this pat weekend about recurrent/refractory small-cell lung cancer (SCLC) drug Rova-T, which became part of the AbbVie portfolio two months ago when the company acquired its developer, Stemcentrx, to the tune of $5.8 billion. Rova-T didn’t perform horribly in its early-stage trials, but given the price tag of the acquisition and the hype, it didn’t perform well enough.
It didn’t take long for analysts to pile on. Cowen and Co., for instance, downgraded ABBV from “Outperform” to “Market Perform,” calling the drug’s efficacy thus far “underwhelming.”
ABBV ended the day down 3.41%.
Smith & Wesson Holding Corp (SWHC)
The official quarterly numbers won’t be posted until June 16th. If the ancillary data related to gun sales from last month is any indication, though, Smith & Wesson may not meet expectations when it reports its fiscal Q3 numbers late next week.
According to data from the Federal Bureau of Investigation released late last week, background checks as a precursor to firearm sales slumped to 1.87 million in May. That was 18% better than May 2015’s background checks for the purpose of purchasing a gun, but it was also an eight-month low, suggesting firearm sales have peaked.
That was enough to spark a 5% selloff from SWHC, leading to an 11.8% setback for the past two trading days.
Best Buy Co Inc (BBY)
Last, but not least, Best Buy shares fell more than 3% on Monday on the heels of reports that its CEO has been shedding his stake in the company’s stock…by a lot. All told, CEO Hubert Joly sold nearly 44% of his shares of BBY, bringing the total down to 511,000 as of last week. That’s roughly $16 million worth left.
Company spokesperson Jeff Shelman defended the sale, saying
“Hubert’s sale is solely related to his desire to diversify his overall personal holdings. He remains firmly committed to Best Buy and is excited to lead the company in this next phase. He has absolutely no plans and no desire to explore other opportunities.”
Investors, however, were less than impressed by his apparent lack of confidence in the company he’s leading.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
