Why SolarCity Corp (SCTY), CVS Health Corp (CVS) and Valeant Pharmaceuticals Intl Inc (VRX) Are 3 of Today’s Worst Stocks

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Despite what looked like a renewed rally effort on Wednesday in the wake of an upbeat Federal Reserve, investors had nothing else to latch onto over the course of the rest of the week. Though stocks tried to log another gain on Friday, by the time the closing bell rang the S&P 500 was down 0.48%, ending the session at 2079.36.

Why SolarCity Corp. (SCTY), CVS Health Corp. (CVS) and Valeant Pharmaceuticals Intl. Inc. (VRX) Are 3 of Today's Worst StocksIt could have been worse, though, and for owners of CVS Health Corp (NYSE:CVS), SolarCity Corp (NASDAQ:SCTY) and Valeant Pharmaceuticals Intl Inc (NYSE:VRX), it was. These three names all lost a great deal more ground on the last day of the trading week. Here’s why.

Valeant Pharmaceuticals (VRX)

For Valeant Pharmaceuticals (and by extension, VRX shareholders) the hits just keep on comin’…. in a bad way.

Already down more than 30% in the aftermath of the now-infamous September 21st tweet from presidential candidate Hillary Clinton that took dead aim at specialty pharmaceutical companies, VRX tumbled more than another 30% since October 20th in the wake of a serious accusation from known short-seller and frequent company-critic Andrew Left, of Citron Research. The accusation effectively accused Valeant Pharmaceuticals of falsifying its sales by exploiting its questionable relationship with drug distributor Philidor Rx.

VRX effectively rejected Left’s claims shortly after they were made public, and the matter was seemingly in the past. Today, however, Valeant publicly cut ties with Philidor Rx, shutting Philidor down.

While the severed relationship doesn’t imply any particular level of guilt, it looks more than suspicious to owners of VRX, sending the stock down a hefty 15%.

SolarCity (SCTY)

The good news is, SolarCity is looking to make dramatic cost cuts in the near future. The bad news is, SolarCity was effectively forced to do so after reporting disappointing Q3 earnings numbers.

Last quarter, SolarCity generated revenue of $113.9 million, topping estimates for $111.4 million. But, the loss of $2.41 per share of SCTY was miles worse than the anticipated loss of $1.95.

With the end of several solar power subsidies set to end in 2017, and costs not falling as quickly as demand, SolarCity is dialing back its rapid growth plans and intends to focus on profitability going forward. With growth being the key driver for the stock, however — and doubts that the company can successfully make such a transition anytime soon — SCTY plunged 22% on Friday.

CVS Health (CVS)

Third-quarter earnings for CVS Health were more than satisfactory. The 2016 outlook, however, was not, sending CVS shares lower to the tune of 5%.

Last quarter, CVS Health earned $1.28 per share on revenue of $38.6 billion. The top line was better than estimates of $37.8 billion, and while the bottom line fell short of estimates of $1.29 per share, profits were still up from the year-ago figure $1.15 per share. Guidance, however, was a problem. Per Friday’s earnings report, CVS Health is now looking for a profit of somewhere between $5.68 and $5.88 per share, versus, analyst estimates of $5.99.

CVS Health explained that while recent initiatives like the acquisition of Omnicare hold long-term promise, the company is also facing a headwind of weak insurer reimbursement rates.

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/2015/10/solarcity-corp-scty-cvs-health-corp-cvs-valeant-pharmaceuticals-intl-inc-vrx-3-todays-worst-stocks/.

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