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Why Rite Aid Corporation, Winnebago Industries Inc., and Semtech Corporation Tumbled Today

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Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Today, the stock market proved unable to build on yesterday's big gains, with the S&P 500 and Nasdaq Composite both falling slightly. In light of the size of Wednesday's Fed-induced rally, just keeping losses at a minimum was an accomplishment. But Rite Aid (NYSE: RAD  ) , Winnebago Industries (NYSE: WGO  ) , and Semtech (NASDAQ: SMTC  ) all posted much more dramatic declines, reminding investors that there are still weak stocks even in a strong overall market environment.

Rite Aid fell 10% after its quarterly report this morning. The drugstore chain managed to boost revenue by 1.9%, with a 2.3% rise in same-store sales coming from an even bigger climb in pharmacy sales. But investors focused on the lack of growth in front-end sales, and on Rite Aid's guidance for the remainder of the fiscal year. With new expectations for same-store sales growth of less than 1%, and a pullback of $0.01 to $0.04 in its projected earnings range, Rite Aid wasn't able to sustain the enthusiasm that had sent its shares up sixfold in just over a year's time.

Winnebago plummeted 14% after its own earnings report disappointed investors. The RV manufacturer grew its net income by more than half, but despite rising demand from customers, its 15% rise in revenue was well short of the roughly 20% increase that investors had hoped to see. That combination has been problematic for many businesses, and even as Winnebago makes efforts to cut costs and find new and innovative vehicles to sell, falling demand for towable vehicles partially offset a 31% gain in motor-home deliveries during the quarter.

Semtech dropped 12% after it issued a warning last night on revenue and earnings for its current quarter. Guidance for $120 million to $130 million in sales for the quarter was $12 million to $14 million below the company's previous estimates, and adjusted earnings per share projections were 35% to 40% below the range that the semiconductor supplier had set earlier. Throughout the industry, companies have been waiting for customers to spend more on capital expenditures, and Semtech cited delays in carriers stepping up to make purchases as one reason for the negative guidance.

Can these stocks recover?
All three of these stocks could rebound and become good stocks for 2014. But smart investors know that there's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report: "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.

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Related Tickers

9/30/2016 4:01 PM
RAD $7.69 Up +0.12 +1.59%
Rite Aid CAPS Rating: ****
SMTC $27.73 Up +0.01 +0.04%
Semtech CAPS Rating: **
WGO $23.57 Up +0.14 +0.60%
Winnebago Industri… CAPS Rating: ***