Free Annual Reports
Biggest Stock Losers In July
Technology stocks dominated the list of the worst performing stocks in the S&P 500 during July 2010, as investors punished stocks that dared to disappoint even slightly on earnings, revenue or the outlook for the future.
IN PICTURES: 5 Tax(ing) Retirement Mistakes
The S&P 500 had a strong performance in July, with all S&P sectors showing a positive return during the month. They overall returned 6.8% in July, led by industrial and basic material stocks.
Medco Health Solutions
Medco Health Solutions (NYSE:MHS) reported earnings in the middle of the month, and although the company beat analyst estimates by 4 cents, investors dumped the stock due to concern about lower margin business being added going forward. The sell off occurred despite Medco Health Solutions putting out a slightly higher forecast for 2011. The stock fell by 13% in July.
Western Digital
Earnings were also the problem for Western Digital (NYSE:WDC), as the stock fell by 12.50% for the month. The company missed on both the top and bottom line in its fourth fiscal quarter, and indicated that it was seeing price weakness in its markets.
During the conference call, management said that demand was weaker than expected and less linear, with more business toward the end of the quarter. This weak demand in combination with higher production levels by the company's competitors led to price erosion.
LSI Corp.
LSI Corporation (NYSE:LSI) released earnings for the second quarter and provided a weaker than expected outlook for the third quarter on both revenues and earnings. During the conference call, management said that the company saw a "softening in demand" late in the second quarter in its Hard Disk Drive business. The stock was down by 12% in July.
Nvidia
Nvidia (Nasdaq:NVDA) doesn't report earnings until August 12, but the company decided not to wait until then, and issued a profit warning and drastically cut its revenue outlook for the current quarter. The company now expects revenues to be in a range of $800-820 million, down from the previous guidance of a range of $950-970 million.
The company cited weakness from customers in China and Europe, as well as a shift to lower margin business due to increased memory costs. Nvidia fell 10% during the month.
And In Closing...
Micron Technology (NYSE:MU) was the worst performing stock in the S&P 500 for July, falling 14%. This company seems to have dropped in sympathy with other chipmakers as investors flee the entire group. The CEO of Micron also reported a large sale of shares during the month, which may have convinced some investors that they had better lighten their position as well.
The Bottom Line
Although the overall index did quite well in July, many stocks had a poor months as investors fled many technology stocks at the first sign of problems. (For additional stock analysis, see Rebounding Airline Industry?)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
IN PICTURES: 5 Tax(ing) Retirement Mistakes
The S&P 500 had a strong performance in July, with all S&P sectors showing a positive return during the month. They overall returned 6.8% in July, led by industrial and basic material stocks.
Medco Health Solutions
Medco Health Solutions (NYSE:MHS) reported earnings in the middle of the month, and although the company beat analyst estimates by 4 cents, investors dumped the stock due to concern about lower margin business being added going forward. The sell off occurred despite Medco Health Solutions putting out a slightly higher forecast for 2011. The stock fell by 13% in July.
Western Digital
Earnings were also the problem for Western Digital (NYSE:WDC), as the stock fell by 12.50% for the month. The company missed on both the top and bottom line in its fourth fiscal quarter, and indicated that it was seeing price weakness in its markets.
During the conference call, management said that demand was weaker than expected and less linear, with more business toward the end of the quarter. This weak demand in combination with higher production levels by the company's competitors led to price erosion.
LSI Corporation (NYSE:LSI) released earnings for the second quarter and provided a weaker than expected outlook for the third quarter on both revenues and earnings. During the conference call, management said that the company saw a "softening in demand" late in the second quarter in its Hard Disk Drive business. The stock was down by 12% in July.
Nvidia
Nvidia (Nasdaq:NVDA) doesn't report earnings until August 12, but the company decided not to wait until then, and issued a profit warning and drastically cut its revenue outlook for the current quarter. The company now expects revenues to be in a range of $800-820 million, down from the previous guidance of a range of $950-970 million.
The company cited weakness from customers in China and Europe, as well as a shift to lower margin business due to increased memory costs. Nvidia fell 10% during the month.
And In Closing...
Micron Technology (NYSE:MU) was the worst performing stock in the S&P 500 for July, falling 14%. This company seems to have dropped in sympathy with other chipmakers as investors flee the entire group. The CEO of Micron also reported a large sale of shares during the month, which may have convinced some investors that they had better lighten their position as well.
The Bottom Line
Although the overall index did quite well in July, many stocks had a poor months as investors fled many technology stocks at the first sign of problems. (For additional stock analysis, see Rebounding Airline Industry?)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Eric Fox
Eric J. Fox, CFA, is a freelance financial writer and has previous experience working in the asset management industry as an equity analyst and portfolio manager on the buy side. His favorite area to write on is the energy sector and he keeps current on the industry by reading Haynesville Shale, Permian Oil and Gas and various other blogs.
Free Annual Reports
