With investors as a whole ready and willing to see the glass as half full rather than half empty on the heels of the expected rate hike — the first in a long while — tomorrow, the post-election rally followed through again today. The Dow Jones Industrial Average even got within striking distance of 20,000. The S&P 500‘s close of 2,271.72 was 0.65% better than Monday’s close, and set another record.
Tuesday wasn’t a winning day for all stocks, however. Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), Southern Copper Corp (NYSE:SCCO) and Inovalon Holdings Inc (NASDAQ:INOV) were all rather well hammered, for a variety of reasons.
Here’s what traders need to know.
Inovalon Holdings Inc (INOV)
Cloud computing technology name Inovalon Holdings updated its 2016 outlook today, and INOV shareholders are none too happy about it. Then again, who can blame them?
For the full year, Inovalon Holdings expects to earn something between 32 and 33 cents per share on revenue of between $426 million and $428 million. The company’s prior guidance was for a profit of between 39 and 46 cents per share of INOV and sales of between $470 million and $490 million.
CEO Keith Dunleavy explained:
“While this is certainly not the situation we expected or desired, it does demonstrate the level of market opportunity for our platform capabilities, the significance of value that can be driven by those capabilities, and the size and scale at which Inovalon is being called upon to partner and deliver them.”
Investors weren’t impressed, however, judging from the 35.4% drubbing INOV took on Tuesday.
Southern Copper Corp (SCCO)
It was a rough day for most material stocks on Tuesday, with the prospect of not just a rate hike tomorrow, but a handful of rate hikes next year all working for the dollar, and therefore against commodities. Gold prices fell 0.7%, while copper prices fell comparably.
Miners and smelters were hit especially hard, as traders selected them as the best way to play the impact of rising interest rates. Freeport-McMoRan Inc (NYSE:FCX) was off by 2%, while BHP Billiton plc (ADR) (NYSE:BBL) fell 2.5%. Southern Copper dished out the most pain to the most shareholders, however, with its 3.5% dip.
Alexion Pharmaceuticals, Inc. (ALXN)
Last but not least, and for the second day in a row, Alexion Pharmaceuticals earned a spot on the daily “worst 3” list.
Yesterday’s sharp 12.8% selloff from ALXN was the response to the sudden surprise resignations of CEO David Hallal and CFO Vikas Sinha. Although not explicitly linked to the matter, the company’s books are being scrutinized, and that sales-accounting probe is reportedly nearing completion. Sinha’s and Hallal’s exits aren’t a good sign that all is as it should be.
Fanning the flames that burned Alexion Pharmaceuticals were comments from RBC’s Simos Simeonidis (who is actually bullish on ALXN, long-term). He opined:
“So, Alexion is clearly in crisis: we won’t know the final outcome for a few weeks …
… Expect stock to be volatile until 10Q is filed, but long-term we see significant value in Alexion. Even with the stock just $5 away from its 52-week low, it is very difficult to predict exactly where the bottom may be, since we’re still waiting for the filing of the 10Q and the findings of the investigation.”
Between Monday’s loss and today’s 4.4% stumble, ALXN is already down 17.2% week-to-date.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
