The Market Just Bashed My Stock!
CAPS Rating(out of 5)
|First Solar (NAS: FSLR)|
|Hyperdynamics (NYS: HDY)|
|BioSante Pharmaceuticals (NAS: BPAX)|
Source: Motley Fool CAPS.
The market tumbled 131 points yesterday, or 1.1%, so stocks that went down by even larger percentages are pretty big deals.
That's going to leave a mark
At what price are consumers willing to pay for solar energy? Whatever it is, we haven't hit it yet. Despite prices falling 40% year over year, there's still not enough demand and First Solar's cut to guidance is yet another reminder the industry has only had its day in the sun because of taxpayer subsidies. Now that they're drying up all around the globe, so is the artificial demand that propped them up.
Despite all the gains solar has made, this renewable-energy source really struggles to survive on its own without government assistance. It pays producers to make the product (subsidies) and it needs to pay consumers to buy it (credits). That's not exactly a robust market.
This is First Solar's second guidance reduction in as many months, and it took down Sunpower (NAS: SPWR) and JA Solar (NAS: JASO) with it. The CAPS solar power sector fell 4% yesterday. So much for that vote of confidence Warren Buffett supposedly gave the solar industry when BerkshireHathaway's MidAmerican Energy subsidiary bought First Solar's Topaz solar farm.
Add the stock to the Fool's free portfolio tracker and follow along on its progress. Let us know in the comments section below whether you agree that the only hope this business has is for the government to keep propping it up.
In the breakdown lane
Last month exploration-stage oil driller Hyperdynamics got swept aside as costs for its exploration well off the coast of Guinea surged. It had to start drilling before the end of the year and maybe it wasn't ready, because it continues to be plagued by operational problems at the well.
Hyperdynamics said mechanical and operational issues have curtailed drilling activity, though it expects to be drilling again within 10 days. Those delays, however, are likely to raise its expenses again. If it can get these problems under control, it could have a lucrative field on its hands. Africa is becoming a hotbed of drilling activity, with Harvest Natural Resources, Total, and Anadarko Petroleum (NYS: APC) all targeting the country's coast.
But CAPS All-Stars aren't so sure Hyperdynamics can make it through to that point, with 56% believing it will underperform the market. Let us know in the comments section below or on the Hyperdynamics CAPS page whether you think its drill program will be successful, and follow its progress by adding it to the Fool's free portfolio tracker.
Crash and burn
BioSante Pharmaceuticals' LibiGel failed to beat a placebo in late-stage trials and the stock was destroyed. The experimental drug was supposed to increase sexual desire in postmenopausal women. The shares lost 16% during regular trading hours, but fell an astounding 78% after the market closed.
LibiGel is a topical testosterone ointment that uses a gel from Antares Pharma (ASE: AIS) . Needless to say, those investors also got a headache from BioSante's news: Shares fell 8% during normal trading and lost another quarter of their value after hours.
It may be that both reactions were a tad overdone, but with investors having been lulled by upbeat progress reports that seemed to indicate the drug was on track to succeed, you probably won't find many willing to plunk down more money on the stock. Once bitten, twice shy.
Add the biotech to your watchlist and tell us on the BioSante Pharmaceuticals CAPS page if it's a stock that will get a rise in the future.
Ready for a resurrection
Just because your stock has taken a beating, that doesn't mean it's going to roll over and die. Markets are known for overreacting. A closer look on Motley Fool CAPS at what's happened to your stock can give you an edge over other investors who just react to the market's lead. With CAPS, you can decide for yourself whether your stock is ready to come back from the dead.
At the time this article was published Fool contributorRich Dupreyholds no position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of Harvest Natural Resources and First Solar.Motley Fool newsletter serviceshave recommended buying shares of Total and First Solar. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.