These Stocks Have Investors Cashing Out

Editor's note: A previous version of this article inadvertently referred to Molycorp in place of General Moly. The Fool regrets the error.

The market can't decide whether it should focus on the Federal Reserve's pumping of cash into the U.S. economy or keep its eye on the unraveling of the European Union. Yesterday it was the latter, as the Dow Jones Industrial Average fell 90 points as the financial components of the index -- Bank of America and JPMorgan Chase -- wobbled over fears that the EU crisis could widen.

The following three stocks faced a run of a different sort as investors turned tail, but don't go running over the cliff with them like a bunch of lemmings just yet: This could just 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.

Company

% Change

General Moly (NYSEMKT: GMO  )

(16.6%)

Oracle (NYSE: ORCL  )

(9.7%)

MAKO Surgical (UNKNOWN: MAKO.DL  )

(7.1%)

Arrested development
Nothing like having your business partner getting arrested to put a damper on things. Rare-earth minerals miner General Moly was looking to finance its Mount Hope project in Nevada by having Chinese conglomerate Sichuan Hanlong Group back its efforts and help it arrange for a loan from the government-owned China Development Bank.

Things were going swimmingly until Chinese authorities arrested the chairman of Sichuan Hanlong on suspicion of harboring a fugitive. Seems Liu Han's brother has been on the lam for years, wanted for questioning in a murder. Not much more information was forthcoming from the tight-lipped authorities, but with its backer in the hoosegow, General Moly had to suspend its efforts to secure the $665 million loan from the CDB.

Although I previously rated General Moly to outperform the markets based on the prospects for its mines coming online, this financing issue raises a lot of concerns that has me withdrawing that rating and figuring we'll have to take a wait-and-see attitude now.

When consulting the oracles fails
Wall Street dumped on business software giant Oracle after it reported disappointing earnings that missed on several fronts, with new software licenses falling 2% (some analysts were looking for 7% growth!), hardware system sales down 23%, and hardware support revenue off 6%.

One analyst finds it "bizarre" that Oracle is unable to make even its own targets when it comes to system sales, noting that it has missed in seven out of the past eight quarters. Wall Street almost uniformly lowered its price targets on the software specialist as a result of the dismal performance, and though some analysts left their various ratings in place, more were cutting the recommendations from "outperform" to something less. 

Oracle blasted its sales team for its anemic effort, but some top Fool analysts think this is a temporary slump from which it will emerge. At 11 times earnings estimates, Oracle is priced around the same as IBM and Microsoft while offering a significant discount to SAP and salesforce.com. Considering its still industry-leading position, that should make it an interesting pick for investors still.

Danger, Will Robinson!
When not even better-than-expected earnings results can keep MAKO Surgical's stock propped up, it shouldn't come as a surprise that positive results from a randomized controlled trial from the beaten-down device maker should send the stock tumbling too.

MAKO said a 10-year evaluation of the use of its RIO system for knee replacements not only increased accuracy but reduced pain, too. The purpose of the study was to compare the usage of the robotic arms in surgery against more conventional means, and the results suggest there are definite benefits through use of the RIO system. Of course, MAKO's stock fell 7%.

Shares have now lost three-quarters of their value from their 52-week high, a precipitous drop causes by skidding sales of its RIO system. The current study might not cause them to reverse course anytime soon, but it will be something MAKO can hang its hat on, at least.

Zero to hero?
Sitting near all-time lows, has MAKO Surgical's robotic-surgery growth story rusted over? To help investors answer this question, Fool.com analyst and MAKO expert David Meier has written a premium research report covering all of the must-know details on the company, including key areas to watch and risks looming in the future for the medical robotics company. Claim your copy by clicking here now.


 


Read/Post Comments (3) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 24, 2013, at 8:35 PM, TheMind12 wrote:

    Rich, you have mistakenly confused General Moly (GMO) with Molycorp (MCP), the firm that mines rare earths. General Moly is a total separate firm with no connection to Molycorp. General Moly is trying to fund their molybdenum project in Nevada and is not under any SEC investigation. Please issue a retraction or correction.

  • Report this Comment On March 25, 2013, at 10:59 AM, Dawgpac wrote:

    Rich, re-check that GMO story.

    Also re:MAKO. 30 bots sold over the second half of 2012 suggests that they've addressed the "skid" that saw 14 bots sold in the first half of 2012. "Flat" sales of 45 for 2013 would still increase the installed base by 30%. The bar is set low for Q1 2013 which will disappoint the shorts as anecdotal evidence appears to show MAKO already surpassing the low sales of Q1 2012.

  • Report this Comment On March 25, 2013, at 11:38 AM, earlygolfer wrote:

    The GMO investigation by the SEC is on the GMO foods which Monsanto produces. It has nothing to do with General Molly

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