It may not have been a red-hot effort, but the buyers did pick up where they left off on Thursday, having taken Friday off. A lack of any alarming news and a handful of decent earnings reports sent to the S&P 500 to a close of 2166.89, up 0.24%.
Not every stock followed the market higher, however. Stratasys, Ltd. (NASDAQ:SSYS), Sprint Corp (NYSE:S) and Hasbro, Inc. (NASDAQ:HAS) each used more than their fair share of red ink, albeit for understandable reasons.
Sprint Corp (S)
Just when it looked like struggling wireless company Sprint was finally going to be able to dig itself out of a hole, a new development came along and pulled the rug out from underneath it, sending the stock down more than 5%.
The prod was the presumed possibility that its lifeline — SoftBank (OTCMKTS:SFTBF) and its CEO Masayoshi Son — was losing interest in keeping the cell phone service provider afloat as it tries to stage a turnaround. Some were guessing that Son would lead SoftBank to buy a big chunk of Sprint’s debt, while others were guessing SoftBank would simply acquire the 17% of S shares it doesn’t already own.
When it was announced today that Softbank was going to acquire ARM Holdings plc (ADR) (NASDAQ:ARMH) to the tune of $32.2 billion, it was a tacit message that Son may be losing interest, or faith, in Sprint’s turnaround effort.
Hasbro, Inc. (HAS)
Toymaker Hasbro reported impressive quarterly results on Monday … perhaps too good. Now there’s no room left for an encore, spooking HAS shareholders.
Last quarter (the company’s fiscal Q2), Hasbro drove a 10% increase in its top line. Profits of 41 cents per share of HAS topped estimates of only 39 cents, and the bottom line grew nearly 25% on a year-over-year basis. Frozen and Star Wars toys were huge hits.
So why did HAS stock lose 7% of its value on Monday?
Because the toymaker thinks those red-hot movies have generated all the growth they’re going to be able to. Looking ahead, the company and observers are expecting another quarter of slowing sales growth as the buzz of Star Wars and Frozen dissipates.
Stratasys, Ltd. (SSYS)
Last but not least, SSYS was down big-time today following an alarming downgrade of it as well as peer and rival 3D Systems Corporation (NYSE:DDD) from Piper Jaffray.
“Following our Q2 checks and results obtained from our quarterly 3D printing survey with Stratasys channel partners; we believe the industry saw a significant slowdown in system demand in the June quarter. Although our checks sounded modestly better than our conversation with 3D Systems VARs, the overall tone remained extremely negative and system demand has seemed to have hit a recent low. Although the 2H of the year is historically better for system sales, we believe the headwinds currently affecting demand likely prevail throughout the year. In turn, we believe Stratasys is at risk of seeing another round of estimate cuts, and we have lowered our 2016 and 2017 revenue and EPS estimates below consensus.”
Jensen lowered its stance on SSYS from “Overweight” to “Neutral,” simultaneously lowering its target price on the stock from $32 to $24, sending shares down 10%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
