Better Retail Sales Bypassed These Laggards
If even a retail sales report full of hope and promise couldn't move some stocks higher, what hope do they have if the markets turn tail? Considering the September retail sales report hid a dark cloud -- that non-seasonally adjusted numbers actually declined in a big way -- Monday's 95-point gain, or almost 1% increase, could still turn the euphoria into melancholia.
But don't run over the cliff with your stock in a lemming-like response to what may be a temporary situation. Let's first see whether they had good reason to fall as panic-fueled routs can sometimes lead to excellent buying opportunities.
Star Bulk Carriers (NAS: SBLK)
MAKO Surgical (NAS: MAKO)
Fusion-io (NYS: FIO)
A solid mess
For dry bulk goods shipper Star Bulk Carriers, not even a 1-for-15 reverse stock split to keep its share price propped up for very long. The stock went from trading at $0.58 a share to $8.70 overnight, yet it immediately began sinking once again.
Just about everyone knows that the glut of ships, lack of demand, falling rates, and an uncertain financial picture in Greece are why Star and the rest of the shipping industry are low-priced. Just about every stock in the sector -- whether dry bulk or tanker -- carries a single-digit price, and many more are below that. Excel Maritime is a shell of its former self, trading for pennies on the dollar. Yet even some of the better names in the industry -- DryShips (NAS: DRYS) , Frontline (NYS: FRO) , and Nordic American Tankers (NYS: NAT) -- are offering distressed pricing.
Although Star Bulk continues to pay its quarterly dividend of just $0.015 per share, investors really have to wonder how long that can last. Having reinstated it in 2009, the shipper has made 13 consecutive payments but the dire conditions easily lead to the conclusion it may be suspended once again. We keep hearing shipping has hit a bottom, but they could still be on the ledge of what may turn out to be the Mariana Trench. There's nothing to indicate there's a real recovery afloat and I'd abandon ship of any dry bulk shipper at the moment.
Uh-oh! Better get MAKO!
There was no specific company news that sent shares of surgical robotics specialist MAKO Surgical tumbling Monday, but analysts view the sector skeptically these days. Privately held Biomet had a 6% increase in sales, but hip and knee implant revenue fell 1% because of lower procedure volumes . Intuitive Surgical (NAS: ISRG) reports its earnings today after the markets close, and it represents another specialty surgical operation suffering from a slowdown in procedures. Stryker (NYS: SYK) reports tomorrow. The full weight of the niche may be weighing on MAKO, which releases earnings in early November.
Foolish blogger D J Krieger makes the case that since MAKO hasn't pre-warned about sales for its quarter investors could arguably make the case it should hit at least the lower end of the reduced expectations it set last quarter, a factor that has already been priced into the stock. Fellow Fool blogger Steve Symington chimes in that most signs do point to better utilization, and with the potential for additional applications of its technology, its discounted valuation is intriguing.
Yet I've also said management is developing a credibility problem surrounding its guidance, so I'm not sure we can make that leap. Two quarters of disappointment in a row means a third strike will count MAKO out. Let me know in the comments section below if you think the surgical specialist can carve out a case for a rebound.
The Jim Cramer effect was on display yesterday for flash memory maker Fusion-io, which the Mad Money host rated a sell yesterday on the basis of it not being a takeover candidate. That hardly seems to be a rationale for the sell-off it experienced, and it should be noted that it's back up 2.5% in early trading today.
Fusion-io has been on a tear as sales surged 49% last quarter and the big move to "big data" gathers speed. After OCZ Technology (NAS: OCZ) warned of significantly lower revenues as it gave away the store on customer rebates in a misguided attempt to gain market share, Fusion stepped back to from the highs it was hitting. Yet standing nearly 70% above the spot it trade at its low point, yesterday's give back didn't amount to much.
I've expected Fusion-io to cash in big on the big data phenomenon having rated the storage specialist to outperform the broad market index on Motley Fool CAPS. The 180,000-member driven investor community translates informed opinion into stock ratings of one to five stars. Fusion-io currently holds a mid-ground three-star rating but I remain convinced it's got more ahead of it. By making a CAPScall as I have, I hold myself accountable for these bullish sentiments, but you can tell me below if you think the memory maker can still fuse together value and growth.
Ready for a resurrection
The recent market sell-off of MAKO Surgical shares has many wondering whether the potential growth prospects of the robotic surgery company make it a buy today or a stock to stay away from. Read our premium report to read up on the details of MAKO's story. Click here to access it now.
The article Better Retail Sales Bypassed These Laggards originally appeared on Fool.com.Fool contributor Rich Duprey owns shares of Intuitive Surgical. The Motley Fool owns shares of Fusion-io, Intuitive Surgical, and MAKO Surgical. Motley Fool newsletter services recommend Intuitive Surgical and MAKO Surgical. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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