Why UnitedHealth Group Inc (UNH), J M Smucker Co (SJM) and Campbell Soup Company (CPB) Are 3 of Today’s Worst Stocks

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Unsure of what to do after rallying so well early in the week (and rallying 10% since the end of October), traders didn’t do much of anything today. The S&P 500’s close of 2,351.16 was 0.17% better than Thursday’s close, which was a solid move to a record high close, but the index didn’t actually make a record intraday high on Friday.

Why UnitedHealth Group Inc (UNH), J M Smucker Co (SJM) and Campbell Soup Company (CPB) Are 3 of Today's Worst StocksHowever, not every stock was so lucky. J M Smucker Co (NYSE:SJM), UnitedHealth Group Inc (NYSE:UNH) and Campbell Soup Company (NYSE:CPB) each ended the week on a sour note, with two of them slumping on disappointing earnings reports and equally disappointing outlooks.

Campbell Soup Company (CPB)

The good news is, Campbell Soup Company managed to top its second fiscal quarter earnings estimates. The bad news is, the company missed its revenue estimates.

For the quarter ending last month, Campbell Soup Company earned an operating profit of 91 cents per share on revenue of $2.17 billion. Analysts were only calling for a profit of 88 cents per share of CPB, but were also looking for a top line of $2.22 billion. The company’s ‘Campbell Fresh’ line reported an 8% dip in revenue, though no division saw meaningful revenue growth.

For its current fiscal year, Campbell Soup Company reiterated sales-growth guidance of between 0% and 1%, which should be good enough to drive per-share profit growth of between 2% and 5%. That would translate into full-year profit of between $3.00 and $3.09 per share of CPB.

CPB ended the day down 6.5%.

UnitedHealth Group Inc (UNH)

In an ironic juxtaposition of news, just one day after UnitedHealth Group announced it had rated as the “World’s Most Admired Company” within the insurance and managed-care industry,  UNH ended up closing 3.7% for the day following news that it was being sued by the Department of Justice for what effectively amounts to Medicare fraud. At one point, the shares were down more than 5% on the news.

The DoJ’s suit joins another suit that was put into motion by a whistleblower back in 2011, alleging that the insurer’s WellMed division, in Texas, had overcharged the government-run program hundreds of millions of dollars by claiming its members were receiving treatments they never actually received.

J M Smucker Co (SJM)

Last but not least, food company J M Smucker may have missed its fiscal Q3 revenue expectations, but it was mostly the organization’s outlook that inspired the 1.4% loss SJM booked for the day.

For the quarter ending in January, Smucker earned $2 per share, as expected. Sales of $1.88 billion, however, fell short of the expected $1.92 billion. Weakness from its coffee and pet foods brands were a core part of the reason for its lackluster report. Coffee sales fell 7%, and pet food revenue was off by 4% on a year-over-year basis.

Looking ahead, the company expects to earn between $7.60 and $7.70 per share for the current fiscal year; it had previously expected to report a profit of between $7.60 and $7.75 per share of SJM. Revenue is expected to fall 3%, versus a prior expectation for a decline of no more than 1%.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/02/why-unitedhealth-group-inc-unh-j-m-smucker-co-sjm-and-campbell-soup-company-cpb-are-3-of-todays-worst-stocks/.

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