Why Geron, Regis, and Nam Tai Electronics Tumbled Today

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.

Investors hoping for a reprieve from last week's downward drop in the stock market were disappointed Monday, as attempts throughout the day to regain at least a little lost ground ended up failing. Yet even though the S&P 500 and Nasdaq Composite fell around 0.5% to 1%, the losses were much worse at a few key stocks, including Geron (NASDAQ: GERN  ) , Regis (NYSE: RGS  ) , and Nam Tai Electronics (NYSE: NTE  ) .

Geron plummeted 15% after the biopharmaceutical company said in an SEC filing that roughly 25% of patients in a Mayo Clinic trial of its myelofibrosis candidate treatment imetelstat have discontinued treatment since it began in November 2012. Nevertheless, Geron believes that it will start its own phase 2 trial based on the preliminary data from the study. In the long run, the results from that study might overcome the concerns that the high proportion of those dropped from the Mayo study could point to potential problems.

Regis dropped 10% after the hair-salon company reported that same-store sales fell 6.2% during the December quarter, sending overall revenue down 7.5%. Regis ended up reversing a year-ago profit, posting a loss of $0.04 per share. CEO Dan Hanrahan pointed to more than $112 million in goodwill impairments and deferred-tax asset valuation allowances as weighing on results yet arguing that they "do not have any economic impact on our business model." Rival Ulta Salon (NASDAQ: ULTA  ) has also struggled recently, though, and so the shortfall from Regis isn't terribly surprising.

Nam Tai fell 12% after the electronics manufacturer reported that revenue dropped by nearly a quarter, sending earnings down by three-quarters. More importantly, the company expects to transform itself into a real-estate development and management company, choosing to give up its manufacturing business entirely. That has many investors nervous about the company's future, especially given the dramatic shift that Nam Tai has in mind. Yet given the weakness in its past core business, desperate times clearly called for desperate measures in Nam Tai's attempt to survive.

Don't get stuck with a bad stock
Nobody likes a bad stock, but understanding the difference between an OK stock and one that can make you rich is essential to your long-term investing results. 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.


Read/Post Comments (0) | Recommend This Article (2)

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.

Be the first one to comment on this article.

DocumentId: 2811896, ~/Articles/ArticleHandler.aspx, 4/20/2014 12:18:55 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement