Why SodaStream, Intercept Pharmaceuticals, and lululemon athletica Tumbled Today

The falling stock market sent the Dow and S&P 500 to their worst levels of the year, and warnings from these and other stocks played a big role in the overall declines. SodaStream plunged 26%, while Intercept Pharmaceuticals gave back 18% and lululemon athletica fell 17%. Find out more about why these stocks plunged today.

Jan 13, 2014 at 8:30PM

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.

Stocks didn't deliver on their bullish promise on Monday, with investors focusing on negative news on the earnings front as evidence that the market might have come too far too fast in 2013 and be poised for a pullback. The broader market dropped 1% or more, but even those sizable drops were timid compared to much larger plunges in SodaStream International (NASDAQ:SODA), Intercept Pharmaceuticals (NASDAQ:ICPT), and lululemon athletica (NASDAQ:LULU).


SodaStream nosedived 26% after releasing disappointing preliminary results for its full fiscal 2013. The company's projected adjusted earnings of $52.5 million for the year were about 20% below what many investors had expected, with sales growth slowing to its worst rate in five years despite the company posting another record year of revenue. A combination of higher costs and lower prices for its products weighed on profitability, and in light of the company's poor third-quarter performance, investors were in no mood to give SodaStream the benefit of the doubt. Going forward, the big question will be whether those who've already bought SodaStream machines will continue to build sales of flavorings and carbonator refills, a key component of the company's long-term growth plan.

Intercept fell 18%, giving back about half of its Friday gains after soaring more than 500% in two days last week. Analysts blamed the decline on Intercept's release of further data on its liver-disease therapy for nonalcoholic steatohepatitis, which pointed to the potential for higher cholesterol in patients who took the treatment. Some also noted greater awareness of liver-specialist and rival Conatus Pharmaceuticals (NASDAQ:CNAT), which released its own development strategy update this morning, including plans to start a phase 2b trial on the use of its orphan-drug emricasan to treat post-orthotopic liver transplant recipients. Conatus also dropped 17% after a big rise Friday, showing the huge volatility in the space right now.

Yoga apparel specialist lululemon's 17% drop today came after its own negative guidance for the holiday quarter. With lululemon now anticipating revenue in a range that's $22 million below earlier estimates -- about 4% -- earnings are likely to come in $0.07 per share below its previous guidance. Surprisingly, the company pointed not to the pre-holiday results from December, but rather at a sluggish January in driving the poor results. Analysts point to the distractions from its quality-control issues in preventing lululemon from taking usual advantage of driving new fashions, but regardless of the cause, falling same-store sales are definitely not something shareholders are used to seeing.

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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 recommends Lululemon Athletica and SodaStream. The Motley Fool owns shares of SodaStream. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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