Some stocks take a pounding, but there's usually what they call a dead-cat bounce. Even if a stock's inevitable path is to head lower, there's usually a respite in the downticks.
It doesn't always pan out that way.
Last week was rather uneventful for the market. The Dow 30, Nasdaq, and S&P 500 all moved higher, posting gains of at least 0.5% along the way.
Some stocks weren't that lucky. More than a few actively traded companies fell every single trading day last week, and more often than not it happened without any material news. Investors just decided to move on, and the small daily downticks added up to double-digit percentage share-price declines.
Let's take a closer look at a few companies that saw their share prices drop in each of this past week's trading days.
Company | March 29 | Weekly Loss |
|---|---|---|
GMX Resources (NYSE: GMXR ) | $2.19 | (32%) |
Mindspeed Technologies (NASDAQ: MSPD ) | $3.32 | (16%) |
James River Coal (NASDAQ: JRCC ) | $1.75 | (15%) |
Ruckus Wireless (NYSE: RKUS ) | $21.00 | (10%) |
LifeLock (NYSE: LOCK ) | $9.63 | (10%) |
Source: Barron's.
GMX Resources was the biggest loser on the New York Stock Exchange, shedding nearly a third of its value on the week.
The oil and gas explorer hasn't been able to bounce back since executing a 1-for-13 reverse stock split three months ago. The move was enough to push GMX's stock comfortably into exchange compliance by keeping its price above $1, but investors often interpret reverse splits as desperate ploys. GMX Resources has now seen its stock lose nearly two-thirds of its value in 2013, making it the worst performer for the quarter on the New York Stock Exchange.
Mindspeed Technologies would seem to be a company on the rise. After posting three quarterly deficits to kick off 2012, the supplier of semiconductor solutions for network infrastructure applications surprised the market by actually breaking even in its most recent quarter.
Despite introducing several new networking solutions during the quarter, Mindspeed joins GMX Resources as a big loser for the quarter. Both companies could very well be victims of the pointless art of window dressing, where fund managers unload the quarter's bigger losers before March 31 to give the illusion that they avoided making bad mistakes.
Silly analysts. Don't they know that performance numbers don't lie?
James River Coal is struggling to turn a profit as a coal producer. Investors are beginning to doubt its long-term viability as the losses mount, and the stock has lost more than two-thirds of its value since peaking in October. It obviously hasn't helped that James River has cranked out much larger deficits than Wall Street was expecting in its two previous quarters. That's the kind of stuff that will take a company under faster than a doomed canary in a coal mine.
Ruckus Wireless is another company that drifted lower in each of last week's four abridged trading days on no material news. The only announcement out of the company was actually positive, as Ruckus landed a deal with Sandals Resorts to upgrade the Wi-Fi at the hospitality company's 23 Caribbean luxury resorts.
Ruckus was actually becoming a turnaround story after a rough IPO. Ruckus went public at $15 in November, falling 18% to $12.25 on its first day of trading. Ruckus went on to more than double after that, and it continues to trade well above last year's IPO after last week's dip.
Finally, we have LifeLock. The provider of identity theft detection and protection services is another recent IPO. LifeLock went public at $9 in October, and it finds itself trading just above that mark today.
LifeLock serves a growing number of worried consumers willing to pay to have their identities monitored. LifeLock has 2.5 million customers, and that figure, as well as LifeLock's revenue, has grown sequentially for 31 consecutive quarters.
Lockup expirations on LifeLock take place today, so last week's selling could've been merely a matter of investors wanting to get out before insiders get a chance to dump their stock. Investors? Paranoid? They may be ideal candidates for LifeLock's services!
Ready for a bounce
If you owned some of these losers, how about following the smart money into winners?
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