5 of Last Week's Biggest Losers

There's never a shortage of losers in the stock market. Let's take a closer look at five of this past week's biggest sinkers.

Company

July 19

Weekly Loss

Liquidity Services (NASDAQ: LQDT  )

$28.98

14%

Chuy's Holdings (NASDAQ: CHUY  )

$36.78

13%

Microsoft (NASDAQ: MSFT  )

$31.18

13%

Select Comfort (NASDAQ: SCSS  )

$24.08

13%

Acacia Research (NASDAQ: ACTG  )

$21.91

12%

Source: Barron's.

Let's start with Liquidity Services. The Web-based marketplace for surplus and salvage assets stumbled after adjusting its guidance for the recently ended quarter. Liquidity Services now sees no more than $231 million in gross merchandise volume going through its marketplace exchanges, well off its earlier range of between $250 million and $275 million. Weaker sales volume also translated into lower adjusted EBITDA and net income targets.

Analysts didn't like the taste of Chuy's this week. Three analysts made moves on the fast-growing chain of Mexican food restaurants, and none of them was positive. On Tuesday we had Stifel initiate coverage of Chuy's with an uninspiring "hold" rating. Robert W. Baird also downgraded its rating on the stock that day, followed three days later by Raymond James.

The soft ratings are largely based on the stock's heady valuation after a huge run since last year's summer's IPO. Chuy's has nearly tripled since going public at $13, and even after this past week's slide, it's still fetching a whopping 44 times next year's projected earnings.

Most of Microsoft's 13% slide happened on Friday, after the company released disappointing quarterly results. Revenue at all of its major subsidiaries fell short of Wall Street goals, and Microsoft's profit of $0.66 a share was well shy of the $0.75 analysts were forecasting.

Microsoft's biggest single-day drop in four years was triggered by fears that the software giant is fading in relevance. There were hopes that Mr. Softy would gain credibility in the smartphone and tablet markets after ambitious updates late last year, but things aren't scintillating on either front. In fact, Microsoft revealed on Thursday night that it's taking a $900 million inventory charge on its Surface RT tablet.

Select Comfort investors had to let some air out of their portfolios after the maker of air-chambered mattresses fell short in its latest quarter. Sales climbed a mere 1% and profitability took a 42% hit as the Sleep Number Bed company invested in new technology and product innovations. Same-store sales dropped 6%, and it's not a good sign that the boom in housing and the peak in refinancing this past quarter didn't spur more premium mattress sales.

Select Comfort did reiterate its guidance for the entire year, suggesting that it will make up for this quarter's shortfall during the balance of 2013. However, investors will be still be tossing and turning in bed until it happens.

Finally, we have Acacia Research slipping after a terrible quarter. Revenue plunged 54%, and adjusted profit of $0.13 a share fell woefully short of the $0.47 analysts were modeling. Acacia's litigation expenses are climbing as it tries to cash in on its patent-rich portfolio, but the current snapshot of its fiscal performance isn't very encouraging.

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