Why Select Comfort Corp., First Solar, Inc., and Ruby Tuesday, Inc. Tumbled Today

Stocks overall posted narrow declines on Monday, but a few story stocks fell much more dramatically. Find out what Select Comfort lost 19%, First Solar dropped 10%, and Ruby Tuesday posted a 9% decline today.

Jan 6, 2014 at 8:31PM

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.

2014 hasn't been kind to the stock market so far, and Monday's performance added to the modest losses that major-market benchmarks have suffered in the first three trading sessions of the New Year. Yet while drops among the major indexes were limited to 0.25% to 0.5%, Select Comfort (NASDAQ:SCSS), First Solar (NASDAQ:FSLR), and Ruby Tuesday (NYSE:RT) fell much more dramatically today.

Select Comfort plunged 19% after it issued a revenue warning for its holiday quarter. The mattress and bed specialist says it expects sales for the quarter to rise just 5%, well off the double-digit percentage growth it initially projected. Investors therefore braced for correspondingly lower earnings, although Select Comfort didn't pin down a figure on the net-income front. With competitor Tempur Sealy (NYSE:TPX) having taken advantage of consumer interest at the lower end of the mattress segment, Select Comfort might be suffering from a lack of premium demand for its Sleep Number systems.

First Solar fell almost 10% on a downgrade from Goldman Sachs, which issued a rare sell rating on the solar company. Goldman believes that First Solar's utility-project focus will end up being its undoing, as residential-solar stocks have gotten a lot more attention and appear to have more immediate growth potential. Nevertheless, First Solar could still produce solid growth as long as prices keep coming down and its operational strength in putting together utility-scale projects continues to outpace its competitors.

Ruby Tuesday dropped 9% in advance of its earnings report due out Wednesday after the market closes. The ailing restaurant chain has working hard to restructure and reduce its debt, making smart repurchases to try to cut its interest costs. It's also made changes to its menu and closed some of its stores in an effort to reduce massive declines in sales at its existing locations. Judging from today's performance, investors are bracing themselves for more of the same despite Ruby Tuesday's best efforts to turn things around.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool owns shares of Tempur Sealy International. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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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