November 2010 Nasdaq Losers

Weaker than expected outlooks for earnings or sales seemed to be the common factor in some of the worst performing Nasdaq stocks during November 2010. The list was also dominated by technology stocks.

IN PICTURES: 8 Signs Of A Doomed Stock

Warner Chilcott PLC (Nasdaq:WCRX) is a specialty pharmaceutical company and was the biggest loser on the Nasdaq in November 2010, falling nearly 21%. Warner Chilcott reported earnings for the quarter ending Sept 30, 2010, and although it beat consensus earnings estimates, the company cut its revenue outlook for fiscal 2010, causing investors to dump this name. Warner Chilcott is facing increased competition which may result in mitigated earnings growth. Investors seem to be concerned that this revenue erosion will continue in 2011.

Brocade Communications Systems (Nasdaq:BRCD) had a terrible November and also ended the month down by 21%. The company reported its fourth fiscal quarter, and exceeded expectations on revenues and earnings. Unfortunately for Brocade Communications, the company offered revenue and earnings outlooks for the first quarter of fiscal 2011 that fell short of what investors were looking for. The company attributed the expected revenue shortfall to a delay in an appropriations bill in Congress.

First Solar (Nasdaq:FSLR) lost 11% during November 2010, as the entire solar sector suffered from a sell-side downgrade by Credit Suisse. The brokerage firm is concerned that growth in solar capacity will exceed demand in 2011.

First Solar also fell in sympathy with its peers, after Suntech Power Holdings (NYSE:STP) reported a disappointing third quarter earnings report, and Sun Power Corp (Nasdaq:SPWRA) issued a weak forecast for 2011 Investors that might be tempted to buy into First Solar after the decline should be aware that the company is hosting a conference call on December 14 to outline its guidance for 2011. The stock is likely to be volatile around that date.

Another entrant in the earnings and/or sales outlook disappointment club is Cisco (Nasdaq:CSCO), which lost 16% in November. The company came in with a solid report for its first fiscal quarter, beating on earnings and revenue. However, Cisco gave a weak outlook for the rest of the fiscal year, citing concern about orders from European customers. The company also expressed unease on demand from the public sector and service provider sub-segments.

The Bottom Line
November 2010 was a bad month to be a technology stock, especially if you issued a weak outlook on sales or earnings for 2011. A number of companies were caught up as investors rushed to sell these names during the month. (Find an investment that will give your portfolio a shot in the arm. Chekc out A Checklist For Successful Medical Technology Investment.)

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