Today’s gain of 0.46% for the S&P 500 Index wasn’t necessarily heroic; we’ve seen bigger. But, with that modest gain, the index — and most of the other key indices — are back above make-or-break lines that otherwise cast a bearish shadow on the broad market.
Not every stock mustered a decent gain on Wednesday though. In fact, some names were decidedly pointed in the other direction. Among the worst of the worst were Dycom Industries, Inc. (NYSE:DY), Mondelez International Inc (NASDAQ:MDLZ) and Otonomy Inc (NASDAQ:OTIC).
Here’s a closer look at what went wrong for each one.
Mondelez International Inc (MDLZ)
The 1% setback Mondelez International shares suffered today wasn’t horrifying, but it was one of the most notable losers among large caps on Wednesday, in light of the reason, and in light of where it was around mid-day.
Blame Warren Buffett, mostly. Some MDLZ shareholders have been wanting, and expecting, an acquisition offer from Buffett-controlled Kraft Heinz Co (NASDAQ:KHC), assuming the combination of Kraft and Heinz in the past indicated an M.O. for the future. It didn’t. Buffett just isn’t a fan of a Mondelez/Kraft Heinz union. Buffett explained:
“There’s not the additive factor if you have 10 big brands versus one. If you decide to buy a Coca-Cola or a Sprite — both from Coca-Cola — the one doesn’t influence the other. Having a group of brands doesn’t transition to that much more bargaining power.”
As was noted, MDLZ recouped most of what it lost on an intraday basis. At one point it was off by as much as 3.5% for the session, though, giving shareholders a sizeable scare.
Dycom Industries, Inc. (DY)
The good news is, Dycom Industries earned more than it was expected to last quarter. The bad news is, neither last quarter’s sales nor its guidance were as strong as expected.
For its fiscal Q4 ending in July, telecom construction company Dycom Industries turned $780.2 million worth of revenue into an operating profit of $1.47 per share. The bottom line was better than expectations of $1.44, but the top line fell well short of forecasts for $798.8 million.
The crux of the 7.3% loss DY shares suffered on Wednesday, however, likely stemmed from the company’s outlook. For the quarter currently underway, Dycom believes it will generate sales of between $715 million and $745 million … enough to turn a profit of between 81 and 96 cents per share of DY. Analysts were calling for an average profit of $1.43 per share for Q1, and revenue of $785 million.
Otonomy Inc (OTIC)
Finally, although it’s only a $108 million company and as such doesn’t draw much attention, it didn’t start out the trading day as a micro-cap name. Biopharma outfit Otonomy sported more than a $600 million market cap. It become a micro-cap stock after OTIC lost a stunning 82.8% of its value after the company reported its flagship drug’s pivotal trial was a failure.
The drug in question, Otividex, was in phase-three trials as a treatment for vertigo. The therapy performed well enough in early and mid-stage trials to merit its continued development, but when the wider final trial’s results were studied, Otividex surprisingly didn’t live up to expectations.
It’s not the end of the world for the company, but the company was mostly built on and around the treatment.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities. Follow him on Twitter, at @jbrumley.
