Why Rite Aid Corporation (RAD), Qualcomm, Inc. (QCOM) and Halliburton Company (HAL) Are 3 of Today’s Worst Stocks

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Stocks got the new trading week started with a step back, bolstering the case that the rally has been and still is out of gas. The S&P 500 ended the day at 2,265.2, down 027%.

Why Rite Aid Corporation (RAD), Qualcomm, Inc. (QCOM) and Halliburton Company (HAL) Are 3 of Today's Worst StocksIt could have been worse, though, and for owners of Rite Aid Corporation (NYSE:RAD), Halliburton Company (NYSE:HAL) and Qualcomm, Inc. (NASDAQ:QCOM), it was worse. These three names largely led the charge among the day’s biggest losers.

Here’s the deal.

Qualcomm, Inc. (QCOM)

As if a downgrade wasn’t enough to up-end a stock, QCOM shareholders were hit doubly hard on Monday after Apple Inc. (NASDAQ:AAPL) filed a lawsuit against Qualcomm, and Nomura downgraded the stock from a “Buy” to “Neutral.”

The lawsuit, filed by Apple seeks $1 billion from QCOM for what it says were unfair royalty charges imposed on the iPhone maker. The downgrade from Nomura Securities was ultimately rooted in concerns surrounding Qualcomm’s impending acquisition of NXP Semiconductors. The deal, announced in October, is expected to run into more regulatory hurdles than previously expected, as its licensing model may be heavily scrutinized in light of similar deals recently completed.

The Apple suit indirectly points to the same concern Nomura has regarding the company’s patent-enforcement business model. Qualcomm drives 80% of its revenue from licensing.

QCOM ended the day 12.7% lower.

Halliburton Company (HAL)

The good news is, oil service and equipment giant Halliburton topped last quarter’s earnings estimates. The bad news is, it fell short of fourth quarter estimates.

Last quarter, Halliburton earned four cents per share on revenue of $4 billion. Analysts were only calling for an operating profit of two cents per share of HAL, while revenue of $4.02 billion just missed estimates of $4.09 billion.

Still, Halliburton feels good about the future of oil, particularly in North America. CEO Dave Lesar commented, “I don’t see that there is going to be the ability for the customer to hold prices down. It’s going to be a supply and demand market and we will work with those customers that want to work for us.” Investors aren’t so sure though, sending HAL to a loss of 2.9% for the session.

Rite Aid Corporation (RAD)

Finally, for the second trading day in a row, pharmacy chain Rite Aid earned a spot on the “Worst 3” list, though for the same reason both times. That is, RAD fell 7.5% today on the increasing concern that it’s intended merger with Walgreens Boots Alliance Inc (NASDAQ:WBA) could very well be delayed, if not altogether squelched.

Although Walgreens Boots Alliance and Rite Aid made the concession of agreeing to sell 865 stores to sidestep any antitrust concerns, it now appears that it still may not satisfy the Department of Justice.

Coming into focus now is the Jan. 27 deadline, after which Walgreens could walk away by paying a nominal fee to Rite Aid. The suitor may decide over the course of the next few days that would be the easier, lower-hassle and lower-cost option.

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/2017/01/why-rite-aid-corporation-rad-qualcomm-inc-qcom-and-halliburton-company-hal-are-3-of-todays-worst-stocks/.

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