The market started the new week with a bullish bang, as most indices tiptoed into record-high territory following the election of France’s Presidential candidate Emmanuel Macron. Traders weren’t quite so bullish at the end of the day though. The S&P 500’s close of 2,399.38 was up a mere 0.09 points.
That was a pittance compared to the setbacks Horizon Pharma PLC (NASDAQ:HZNP), Melco Resorts & Entertainment Ltd (ADR) (NASDAQ:MLCO) and Liberty Global plc – Class A Ordinary Shares (NASDAQ:LBTYA, NASDAQ:LBTYK) suffered on Monday, however. These three names were among the worst of the worst, albeit for understandable reasons.
Here’s what traders need to know.
Liberty Global plc (LBTYA)
U.K.-based telecom and cable television name Liberty Global unveiled its first-quarter results on Monday, and investors weren’t thrilled … if the 7.8% plunge LBTYA shares dished out is any indication. For the quarter in question, revenue grew 2.1% to $3.52 billion, and though the net loss narrowed from $334 million to a loss of only $293 million, it was still a net loss … something LBTYA shareholders have seen a little too often.
However, it wasn’t so much last quarter’s results that did all the damage to Liberty Global shares — it was the company’s revised guidance. The company now only sees cash flow growth of 5% for 2017, down from prior guidance of between 6% and 7%.
Nevertheless, some analysts still like Liberty Global’s prospects. Morningstar’s Allan Nichols is one of them. He wrote in response to the report, “Liberty Global (LBTYA) reported slightly weak first-quarter results, but we are maintaining our fair value estimate for now, along with our narrow moat rating. We believe the shares are slightly undervalued.”
Melco Resorts & Entertainment Ltd (ADR) (MLCO)
Casino company Melco Resorts & Entertainment tried to soften the blow by announcing a stock-buyback of its ordinary shares, but MLCO owners proverbially crunched the numbers and saw the news as net-negative.
The specifics: Melco will be issuing 27.7 million shares of its ADR, and 82 million ordinary shares. It’s also going to purchase all 165.3 million ordinary shares currently owned by Crown Asia, ending a partnership that’s been in place for twelve years.
Crown’s exit and Melco’s purchase of its stake led MLCO to a loss of 3.9% for the day.
Horizon Pharma PLC (HZNP)
Last but not least, drugmaker Horizon Pharma lost a whopping 35% of its value on Monday following a very disappointing first-quarter report.
For the quarter ending in March, Horizon Pharma reported an adjusted profit of 21 cents per share on revenue of $220.9 million. Though sales were up, they fell short of the expected $248 million, and earnings missed estimates for a profit of 23 cents per share of HZNP.
Its primary care arm’s sales were the weak link, though it’s likely the company’s outlook took the biggest toll on HZNP shares today. Horizon Pharma had been expecting a top line of between $1.24 billion and $1.29 billion this year, but dialed that back to a range of between $1.0 billion and $1.03 billion.
In simplest terms, Horizon’s primary care business is suffering the same fate as many other pharmaceutical players …. payers are growing weary of soaring drug prices.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.