U.S. stocks (mostly) reached new record high on Tuesday, not so much from a salvo of good news but from a notable lack of bad news. That bullish drift didn’t prove beneficial to every stock, though. Case(s) in point? Youku Tudou Inc (YOKU), Globalstar, Inc. (GSAT) and Himax Technologies, Inc. (HIMX). These three high-profile names took on plenty of water today despite the rising tide.
Himax Technologies (HIMX)
Still licking its wounds from a disappointing third quarter and troubling fourth-quarter guidance, the rug got pulled out from underneath Himax Technologies today, which closed down 7%. Oppenheimer downgraded HIMX stock today, from an “outperform” rating to a mere “perform.”
The Oppenheimer analysts responsible for the downgrade expressed concerns regarding…
“… 1) broader Samsung weakness; 2) share shifts in the Chinese handset market; 3) slower UHD adoption; and 4) ascribing very little value to the microdisplay segment… We do expect 2015 to be a growth year, but see the Street underestimating the volatility that the mobile handset market will bring next year.”
As a result, Oppenheimer lowered its 2014 earning estimates from 48 cents to 43 cents per share of HIMX stock. Next year’s earnings outlook was lowered from 53 cents per share of HIMX stock to 48 cents.
Youku Tudou — better known just as Youku — saw its stock stumble to the tune of nearly 11% on Tuesday, although for no clear reason. There wasn’t any news from or even about the company today. The most likely culprit for the meltdown was instead waning momentum stemming from last week’s pre-earnings advance and a couple of concerning analysts actions that needed time to simmer.
Last Thursday, Youku Tudou missed its third quarter earnings estimates of a loss of 82 cents per share of YOKU stock by posting a loss of 88 cents per share… despite the 29% increase in revenue. The next morning, Deutsche Bank analyst Vivian Hao noted:
“‘…despite the encouraging subscription revenues (+473 percent YoY/+47 percent QoQ), we believe Youku is still struggling in mobile monetization with a stagnating ~30 percent of total revenues. Also, we expect margin pressure to continue given ongoing arms race in content cost.”
HSBC jumped on the bandwagon, downgrading YOKU stock from neutral to underweight last Friday. The stock held on for a couple of days, shrugging off the concerns. Time finally caught up with the stock on Tuesday, though.
Last but not least, though prior to today it looked like Globalstar was going to completely dig its way out of the good-sized hole it fell into in October following some alarming research from Kerrisdale Capital was released, today’s 6% pullback from GSAT stock suggests the bears may not quite be done yet.
There was no particular catalyst for the drop. It’s just the nature of the GSAT stock beast. As Globalstar CEO Jay Monroe explained in an interview given on Monday, GSAT is simply a polarizing stock that’s right in the middle of an FCC battle for bandwidth.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.