Why Dicks Sporting Goods Inc (DKS), Rite Aid Corporation (RAD) and Davita Inc (DVA) Are 3 of Today’s Worst Stocks

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Confused by the disappointing number of new-home starts for April but inspired by last month’s surge industrial activity, the market spent the bulk of the day waffling around the breakeven level. By the time the closing bell rang though, traders had made a decision … they chose not to decide. The S&P 500’s close of 2,400.67 was only 0.07% less than Monday’s last trade.

Why Dicks Sporting Goods Inc (DKS), Rite Aid Corporation (RAD) and Davita Inc (DVA) Are 3 of Today's Worst StocksNot every name escaped trouble on Tuesday, however. Dicks Sporting Goods Inc (NYSE:DKS), Rite Aid Corporation (NYSE:RAD) and Davita Inc (NYSE:DVA) were all sent rather deep into the red, although for understandable reasons.

Davita Inc (DVA)

While most publicly traded companies put forth a massive amount of money to remain in the public’s eye, something the wrong kind of attention can be miserable. Just ask shareholders of dialysis company Davita, who watched their DVA shares tumble 6% on Tuesday when word of semi-celebrity John Oliver’s Sunday night rant railing against the company’s ethics went viral.

Oliver, host of HBO’s political talk-show Last Week Tonight, took dead aim at handful of things Davita CEO Kent Thiry had said in the past that put the company in a less-than-flattering light. The most damning of them all, however, was comparing the kidney-dialysis company to Taco Bell, suggesting the business was little more than a cash-collection machine that required minimal maintenance.

Fanning the flames that scorched DVA shares today was Oliver’s take that Davita’s dialysis centers were less than adequately sanitized.

Rite Aid Corporation (RAD)

Not that the odds of a merger between Rite Aid and Walgreens Boots Alliance Inc (NASDAQ:WBA) were all that great before Tuesday, but after Tuesday’s news, those odds are even worse.

Walgreens’ effort to acquire rival Rite Aid has been riddled with problems and delays since it was first announced in late 2015. The core headwind has come from the Federal Trade Commission, which is concerned that such a pairing would eliminate too much competition within the nation’s drugstore space. Although the FTC had yet to say yes, it hadn’t said no either, leaving a glimmer of hope glowing.

That glimmer grew considerably darker today, when it was reported that the FTC has issued requests for information from Walgreens vendors as well as Walgreens’ rivals. Although it’s just information, that fact that the FTC is asking at all suggests there’s just something they don’t like about the union of the two companies.

RAD ended the day down 8.0%.

Dicks Sporting Goods Inc (DKS)

Finally, sporting goods retailer Dicks Sporting Goods gave the market a not-so-gentle reminder today that most retailing stocks remains on the ropes, even if some retailers are holding their own in terms of results.

On Tuesday, DKS shares fell a whopping 13.7% following the release of the company’s first-quarter earnings. Dicks earned the expected 54 cents per share on sales of $1.8 billion. Although analysts were looking for a top line of $1.84 billion, both the bottom line and top line were up from the year-ago figures of 50 cents per share and $1.66 billion. Same-store sales were up 2.4% for Q1, however, falling short of guidance for a 3% to 4% improvement in same-store revenue.

Between the same-store sales shortfall, the message being sent by Dicks Sporting Goods’ decision to cut jobs and the contraction of new-store plans through 2019, the bears had plenty to latch onto.

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/2017/05/why-dicks-sporting-goods-inc-dks-rite-aid-corporation-rad-and-davita-inc-dva-are-3-of-todays-worst-stocks/.

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