Although initially positioned for a weak start on Thursday morning, the longer traders had to think about the fact that Q4’s GDP growth rate was better than expected, the more willing they were to buy. By the time the closing bell rang, the S&P 500 was at 2,368.06, up 0.29%.
Thursday wasn’t a winner for every name though. Lululemon Athletica Inc. (NASDAQ:LULU), Akamai Technologies, Inc. (NASDAQ:AKAM) and Cenovus Energy Inc (USA) (NYSE:CVE) found a way to skip out on the rally.
Here’s a closer look at why each missed the bullish boat.
Cenovus Energy Inc (USA) (CVE)
It may have been good for ConocoPhillips (NYSE:COP), but as far as Cenovus Energy shareholders are concerned, they were left holding the bag … if today’s 13.7% plunge from CVE is any indication.
Long story made short, ConocoPhillips has agreed to sell its 50% stake in the Foster Creek Christina Lake oil sands partnership, in Canada — as well as sell its western Canada Deep Basin gas assets — to Cenovus for $13.3 billion worth of cash and CVE stock.
The oil sands business had been a tough (and mostly unprofitable) one for ConocoPhillips. Although it could work were the price of oil higher, it’s not been a venture that’s paid off. Better off without the headache, UBS upgraded COP to a “Buy” this morning due to the fact that the agreement was so materially accretive. That “materially accretive” will come right out of Cenovus Energy’s bottom line.
Akamai Technologies, Inc. (AKAM)
CVE wasn’t the only name to get whacked by doing a deal investors didn’t like. IT service provider Akamai Technologies also announced an acquisition AKAM investors think it could have done without.
After yesterday’s closing bell rang, Cambridge-based Akamai Technologies reported it would be acquiring SOASTA … a company that helps companies with websites or that operate apps keep a firmer grip on their visitors and users’ experiences.
It’s a technology that dovetails nicely into what Akamai Technologies already does, but the growth potential of SOASTA’s platform is questionable. As Biz Journal’s Gina Hall pointed out, the Wall Street Journal said five years ago that the company was one of the “Next Big Things,” but it has not become all that big yet.
AKAM ended the day down 4.6%.
Lululemon Athletica Inc. (LULU)
Finally, shares of athletic apparel maker Lululemon Athletica booked a whopping 23.4% loss on Thursday following a lackluster fourth-quarter report and an even more disappointing outlook for the year now underway.
For the quarter ending in January, Lululemon earned $1.00 per share on sales of $789.9 million. The top line was a tad better than the expected $785.1 million, while the bottom line just missed estimates for a profit of $1.01 per share of LULU.
The bulk of the damage done today stemmed from the outlook for 2017. The midpoint of the company’s 2017 profit guidance range is $2.31 per share, versus analysts’ collective estimates of $2.56. Making matters worse is a Q1 revenue outlook that’s 35% less than analyst projections.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
