Today's 3 Worst Stocks in the S&P 500

These 3 stocks, including one biotech with big potential, fell Wednesday despite only modest market declines

Feb 5, 2014 at 7:04PM

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.

The stock market ended lower today, though the losses weren't anything like the sharp daily declines investors have been getting used to this year. While it may feel like 2014's brought nothing but pain and hardship to your portfolio, the S&P 500 Index (SNPINDEX:^GSPC) is down just 5.1% so far this year. Keep in mind, too, that the stocks entered 2014 at all-time highs, so Wall Street's still doing OK. With little macro news to fuel excitement, the benchmark S&P index fell 3 points, or 0.2%, to end at 1,751.

Of course, in any grouping of 500 stocks, there will be dramatic decliners no matter what the broader market does, and Cerner (NASDAQ:CERN) shareholders were the victims of that phenomenon today. Cerner's stock slumped 6%, even though its quarterly results -- which it announced Tuesday afternoon -- were largely in line with expectations. Sales grew at a 12% yearly rate in the fourth quarter, slightly exceeding forecasts. Projected first quarter earnings of $0.36-$0.37 per share were the culprit here, narrowly missing Wall Street's $0.38 EPS estimate. For stocks with high multiples like Cerner, even minor disappointments like this can send shares spiraling downward.

Gilead Sciences (NASDAQ:GILD) investors were victims of very similar circumstances today, as shares dropped 4.7% after yesterday's earnings. Gilead Sciences basically had a blowout quarter, beating profit estimates by 10% and revenue expectations by 9.5%. But it was what Gilead didn't address that sent shivers through investors' spines. The company's Hepatitis-C treatment, Sovaldi, has been the subject of much speculation on Wall Street; Sovaldi's potential success could act as a catalyst for the stock if it sells well. Gilead, however, chose not to even project what Sovaldi sales would be like in the coming year stoking fears that expectations for the treatment are too high.

Finally, shares of San Antonio-based petroleum refiner Valero Energy (NYSE:VLO) lost 3.9% Wednesday. Sadly there's nothing too dramatic to report about the slump today -- oil and gas stocks were simply the worst performers in the stock market today. On top of that, Valero Energy shares are fairly volatile, and they've rallied more than 25% in the past six months, so investors may merely be cashing in on gains. Trading at a P/E of just 9.3 while paying a 2% annual dividend, Valero still looks like a solid, if low-growth, option for more conservative long-term investors.

2 game-changing biotechs revolutionizing the way we treat cancer
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John Divine has no position in any stocks mentioned. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.

The Motley Fool recommends Gilead Sciences. 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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