Why Activision Blizzard, Inc. (ATVI), Coty Inc (COTY) and Lockheed Martin Corporation (LMT) Are 3 of Today’s Worst Stocks

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Tepid inflation, solid housing starts and better-than-expected industrial productivity for July left investors a bit confused on Tuesday. Fanning the flames of indecision was the “wait and see” mindset in front of Wednesday’s release of the minutes from the most recent Federal Open Market Committee meeting. By the time the closing bell rang, the S&P 500 was back at 2178.15, down 0.55%, and ending the session near last week’s average closing level.

Why Activision Blizzard, Inc. (ATVI), Coty Inc (COTY) and Lockheed Martin Corporation (LMT) Are 3 of Today's Worst StocksNot every stock simply coasted lower on Tuesday, however. Activision Blizzard, Inc. (NASDAQ:ATVI), Coty Inc (NYSE:COTY) and Lockheed Martin Corporation (NYSE:LMT) all logged much bigger losses, but for understandable reasons.

Activision Blizzard, Inc. (ATVI)

In the grand scheme of things investors may worry about it too much — it’s not always relevant when a company insider sells a big chunk of his or her shares. It’s even less relevant when those shares are sold not so much to put the proceeds in someone’s pocket, but rather, as part of estate planning measures for someone else.

All the same, shareholders were a bit rattled today when Activision Blizzard CEO Bobby Kotick and Chairman Brian Kelly sold $709 million worth of ATVI — almost half of their collective position — for estate planning purposes.

The two still own more than 37 million shares of ATVI between them, or about $1.48 billion worth of the $29.7 billion company. The market still mostly interpreted it as a sign that the two top guys are losing faith in the firm.

ATVI closed 5% lower on Tuesday.

Coty Inc (COTY)

Beauty product maker Coty was down close to 5% when the company acknowledged in its fourth-quarter results that the purchase of some now-former Procter & Gamble Co (NYSE:PG) has proven a bit costlier than expected.

The good news is that Coty topped expectations for last quarter’s top and bottom line. The company earned an operating profit of 13 cents per share on $1.08 billion in sales, versus analyst estimates for earnings of 6 cents per share of COTY and revenue of $1.05 billion.

The bad news is, the integration of P&G’s beauty brands like Hugo Boss fragrances and cosmetics brand Covergirl haven’t been cheap. The cost to hammer out the melding of the purchased assets doubled to a little more than $90 million last quarter, leaving COTY shareholders to wonder how much more unexpected cost is in the cards.

Lockheed Martin Corporation (LMT)

Activision Blizzard was hardly alone in the gutter today. Defense contractor Lockheed Martin also saw its shares fall by 4% when the company reported a recent spin-off had not borne the fruit it was supposed to.

The spin-off of Lockheed Martin’s IT business to Leidos was lauded when it was first unveiled in January. Information technology isn’t quite Lockheed’s milieu, and although it is profitable, it was a pain to operate. Most believed LMT would be better serviced by focusing on equipment, and even Lockheed Martin suggested cutting loose the unit would ultimately allow it to retire some LMT.

As it turns out, not so much. The market was expecting the deal to lead to the retirement of 10 million shares of LMT, but when the details of spin-off were released with the official completion of the deal, the tally was only 9.4 million shares retired.

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/2016/08/why-activision-blizzard-inc-atvi-coty-inc-coty-and-lockheed-martin-corporation-lmt-are-3-of-todays-worst-stocks/.

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