This Week's 5 Dumbest Stock Moves

Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. As I do every week, let's take a look at five dumb financial events this week that may make your head spin.

1. Cracking open Pandora's box
Pandora
(NYSE: P  ) is playing an unfamiliar tune.

The leading music streaming service revealed metrics for the month of June that seemed impressive on their own. Pandora served up 1.08 billion hours of music last month, a whopping 77% increase over the past year. Registered users also rose a healthy 51% to 54.5 million.

However, those numbers don't look so hot when investors see where Pandora was a month earlier. The music discovery service dished out 1.1 billion hours of music to its 53.3 million listeners in May. Yes, we're looking at a sequential dip in listening and a mere 2% sequential uptick in listeners. Simple math then tells us that the average active user spent less time streaming Pandora in June than in May.

Bulls may argue that it's a seasonal thing, but there was no summertime slump last year. Pandora went from serving up 592 million hours of audio in May of last year to 605 million hours the following month.

2. You can't spell makeover without MAKO
MAKO Surgical (Nasdaq: MAKO  ) took a nasty 43% hit on Tuesday after posting disappointing sales of its RIO system.

The orthopedic-robotics company isn't having a problem pleasing the early adopters that have already purchased the costly system. Procedures performed were up a sharp 66% for the quarter ending in June.

MAKO's challenge has been to convince the medical masses that its platform is superior, and it has apparently been a hard sell. It was difficult to foresee this kind of debacle, but investors may have been tipped off when the company came up woefully short in its previous quarter.

All surgical-robotics specialists aren't the same.

3. This state isn't so solid
We've seen plenty of companies take a hit after following up blowout results with uninspiring guidance, but a stock can still fall if it gets it the other way around.

OCZ Technology (Nasdaq: OCZ  ) tumbled despite its better-than-expected outlook for the current quarter. Unfortunately, the enterprise flash memory specialist fell short in its most recent quarter. OCZ posted a larger-than-expected deficit, and its revenue -- while up a seemingly impressive 54% -- was actually quite a bit below what the market was expecting.

It may seem like a mixed report with an encouraging near-term view, but Wall Street didn't see it that way. Credit Suisse and FBN Securities downgraded the stock on the news.

4. This value isn't so super
Yield chasers always need to be careful out there.

Sometimes a dividend-paying company is beaten down for a good reason, and going after that meatier yield can be hazardous to your wealth.

SUPERVALU (NYSE: SVU  ) is the latest fiasco. The eroding price in recent months pushed the yield up to 6.8% as of yesterday's close. Today's yield: 0%.

The stock crumbled on Thursday after the grocery store operator suspended its dividend in a desperate move to preserve capital. The country's third-largest supermarket will also begin exploring strategic alternatives, but the market's seeing this more as a sign of surrender than a prelude to a buyout at a juicy premium.

5. The HP weigh
It's probably not a surprise that we're not buying as many desktops and laptops as we used to, but market leader Hewlett-Packard (NYSE: HPQ  ) may also be the market bleeder.

PC tracker Gartner issued its quarterly update for PC shipments, and the news is pretty grim. The number of computers shipped in this country fell by 5.7% during this year's second quarter. There was a still-surprising 0.1% decline worldwide.

The news gets even worse for HP, as its stateside and worldwide shipments fell 12.7% and 12.1%, respectively, according to Gartner's report.

It's a familiar drum that the industry is beating these days. PC sales have been weak for several quarters as folks turn to tablets and smartphones for basic computing needs. However, the fact that the company with the greatest market share both worldwide and domestically (HP), is suffering double-digit declines in shipments is frighteningly ominous.

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The Motley Fool owns shares of MAKO Surgical and SUPERVALU. Motley Fool newsletter services have recommended buying shares of MAKO Surgical. Motley Fool newsletter services have recommended buying calls on SUPERVALU. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


Read/Post Comments (4) | Recommend This Article (9)

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  • Report this Comment On July 13, 2012, at 12:15 PM, claude043 wrote:

    All rule breakers that offer something that is really different and new must cross the chasm in their marketing/sales programs.

    Thus, in the most relevant sense, all of them are the same.

    A very, very small number of rule breakers manage to catch a wave of enthusiasm that is enough to create a stampede of the herd, and so avoid the chasm in favor of a rush.

    We suggest that commentary published on SA is most useful when the insinuating or snide comments are avoided and the facts are left to speak for themselves in each specific situation.

  • Report this Comment On July 13, 2012, at 5:33 PM, ddbikessamsara wrote:

    Let's see here. OCZ generated BOOKED revenues of $113.6 million - a 54% INCREASE over the prior year. The mighty analysts had projected $115.7 million for the quarter so the TERRIBLE miss was a paltry 2.1 million -a less than 2% "miss" and this is described as "quite a bit less than the market expected". Why don't you dig into the report and see the BOOKINGS for the quarter were $140 million which was a gigantic 20% MORE than "the market expected". They had a supply chain glitch which made them delay shipment and thus recognize the extra revenue by the arbitrary date of May 31st. ALL that product has subsequently shipped but that doesn't matter in the twisted logic of the Wall Street morons. MORE is LESS in their warped view. A 20% haircut for actually doing much better than they were "expected" to. No wonder America is in decline when companies can't run a business the way it needs to be run and are expected to screw themselves and their customers to meet the precious analyst "expectations" then get reamed no matter what they do.

    You also left out the part where they guided to full year revenues of $630-700 million, profitabilty and positive cash flow - all of which are vitally important for any investor to know but of course you would rather point out a very minor hiccup this quarter and try to turn it into a bumbling disaster . This is just a slanted, narrow minded and greatly misleading trash article feebly masquerading as financial journalism.

    It is a travesty and embarrassment but Wall Street and the Motley Tool obviously have no shame.

  • Report this Comment On July 15, 2012, at 9:35 AM, DrP79 wrote:

    30 days in June and 31 days in May

    1.08/30 = 36 million/day in Jun

    1.10/31 = 35 million/day in May

  • Report this Comment On July 16, 2012, at 1:03 AM, bayhilleq wrote:

    Mako....really? That stock has done so much more poorly than the stock market in general prior to the "nasty 43% hit" on Tuesday. It has been a huge loser! When do you guys get anything right???

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