Why Plug Power, Aeropostale, and Raptor Pharmaceuticals Tumbled Today

Most investors in the broader stock market focused on the Ukrainian situation, resulting in a modest selloff for major market benchmarks. But these three stocks fell much more sharply. Find out why.

Mar 14, 2014 at 8:30PM

Friday's market action involved many of the same concerns that have plagued stock investors all week, including the planned referendum in Crimea on whether to break off from Ukraine and join Russia. Nervousness led to small declines for broad market measures, with the Dow posting its fifth straight loss. But some stocks suffered much more dramatic moves downward, with Plug Power (NASDAQ:PLUG), Aeropostale (NYSE:ARO), and Raptor Pharmaceuticals (NASDAQ:RPTP) among the worst performers of the day.

Plug Power fell 16% as the popular fuel-cell company suffered from analyst downgrades, reversing all of the stock's gains yesterday following Plug's positive earnings report. One analyst actually raised its price target along with its downgrade, arguing that at current prices, the stock's valuation is reasonable. Yet, the danger that another analyst identified was that it could take longer for potential customers to get the infrastructure in place to supply fuel-cell equipment with the hydrogen they need to operate. If that happens, then expected sales could end up getting deferred into future quarters or years, and that would slow Plug's growth rate and lead to a reversal of sentiment among growth-hungry momentum investors. The move also pulled down industry peers FuelCell Systems (NASDAQ:FCEL) and Ballard Power Systems (NASDAQ:BLDP), which dropped 9% and 5% respectively.

Aeropostale plunged 20% in the wake of the teen retailer's poor results for its fourth quarter. Sales crashed 16%, producing an adjusted loss in what is always a key quarter for the retail industry. Guidance for those losses to double during the current quarter was much worse than investors had expected to see, and even though Aeropostale is taking steps to try to reinvigorate its brand and reawaken some of its growth from past years, shareholders have started to worry about whether the company has enough cash to make a true turnaround. On that score, Aeropostale's arrangement to obtain financing from hedge fund Sycamore Partners might have been more counterproductive than encouraging.

Raptor Pharmaceuticals plummeted 24% after the small biotech gave discouraging guidance for sales of its key drug Procysbi for the current fiscal year. With expectations of just $55 million to $65 million in sales for the treatment for nephropathic cystinosis, Raptor's impressive growth wasn't enough to keep investors happy, especially given that the stock has soared on hopes that Procysbi would become a blockbuster drug for the company. With some other potential indications for Procysbi in the company's pipeline, Raptor could pose an interesting value for those who believe that the prospects for its key drug are brighter than shareholders seem to think after today's plunge.

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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.

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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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