Why Ford Motor Company (F), Potash Corporation of Saskatchewan (USA) (POT) and Whole Foods Market, Inc. (WFM) Are 3 of Today’s Worst Stocks

Advertisement

Still unsure of what’s in store for stocks after a big run up and subsequent sky-high valuations, traders were once again content to let the market drift sideways until the picture becomes clearer. The S&P 500‘s close of 2170.06 was 0.16% higher than Wednesday’s close.

Why Ford Motor Company (F), Potash Corporation of Saskatchewan (USA) (POT) and Whole Foods Market, Inc. (WFM) Are 3 of Today's Worst StocksNot every name managed to sit on the fence Thursday, however. Ford Motor Company (NYSE:F), Potash Corporation of Saskatchewan (USA) (NYSE:POT) and Whole Foods Market, Inc. (NASDAQ:WFM) were bruised and battered, mostly thanks to pessimistic outlooks.

Ford Motor Company (F)

When General Motors Company (NYSE:GM) unveiled its second quarter numbers last week, investors largely looked past a handful of key concerns and chose to see the glass as half-full rather than half-empty for the company as well as for the industry. After this morning’s Q2 announcement from peer and rival Ford Motor Company, though, investors have been forced to rethink everything.

The numbers: Last quarter, Ford earned 49 cents per share on $39.5 billion in revenue. The top rolled in better than the year-ago sales total of $37.3 billion, but the bottom line fell from 54 cents per share in the second quarter, as the company was forced to offer price-breaks to keep revenue rolling. The earnings total also missed estimates of 60 cents per share of Ford, though the revenue did top estimates of $36.3 billion.

The bulk of the 8% plunge F shares dished out today, however, may have more to do with CFO Bob Shanks’ assessment of the all-important U.S. economy, where Ford derives 90% of its profits. He described it as “maturing,” then following that up with a lowered economic growth outlook that could crimp U.S. auto sales more in 2017 than they’ve already been stifled in 2016.

Potash Corporation of Saskatchewan (POT)

Fertilizer company Potash Corporation of Saskatchewan — usually just called Potash — was yet another victim of an alarming earnings report and outlook today.

All told, Potash earned the expected 18 cents per share last quarter, but came up short on the revenue front. The top line of $935 million missed the consensuses estimate of $1.137 billion by a fairly wide margin.

The bulk of the 7% setback POT suffered today, though, stemmed from the company’s decision to cut its dividend in step with its lowered profit outlook. The outfit now anticipates a profit of between 40 and 55 cents per share for 2016 (down from prior guidance of between 60 and 80 cents), forcing the Canadian company to lower its per-share dividend by ten cents beginning with the September cycle.

Whole Foods Market, Inc. (WFM)

Last but not least, F stock wasn’t the only name to get hit hard by earnings news on Thursday. Organic grocery outfit Whole Foods Market saw its WFM shares fall 9% today after posting its fiscal Q2 numbers this morning.

The top line of $3.7 billion was in line with expectations, as was the profit of 37 cents per share. Nevertheless, with earnings falling from 43 cents per share a year earlier against a backdrop of a same-store sales dip of 2.6% (versus the expected same-store sales lull of 2.4%), the company didn’t do itself any favors with the market.

Perhaps the biggest prod for Thursday’s strong selling, however, was the downgrade from S&P Global Market Intelligence analyst Joe Agnese. He now deems WFM a “Strong sell,” opining:

“Comparable store sales growth declined 2.6%, more than we expected, on lower traffic (-2.7%) and basket sizes (-0.1%). Sales growth trends remain weak in first 3 weeks of Sep-Q, despite easier comparisons. Margins narrowed as priced reductions, increased marketing spending and higher technology expenses offset labor cost cuts.”

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

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2016/07/ford-motor-company-f-potash-corporation-of-saskatchewan-usa-pot-and-whole-foods-market-inc-wfm-3-todays-worst-stocks/.

©2024 InvestorPlace Media, LLC