Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Why The Western Union Company, BB&T Corporation, and International Business Machines Are Today’s 3 Worst Stocks

Six in 10 stocks advanced in the stock market today, as weekly jobless claims came in lower than expected. The four-week moving average, a much-watched measure of the employment market's health, came in at 312,000, the lowest reading since October 2007. But no matter how uplifting the economic news was today, nothing could stop shares of The Western Union Company (NYSE: WU  ) , BB&T Corporation (NYSE: BBT  ) , and International Business Machines (NYSE: IBM  ) from trailing the market, as investors got whiff of significant headwinds facing all three companies. The S&P 500 Index (SNPINDEX: ^GSPC  ) , for its part, finished the shortened trading week with a fourth straight day of gains, adding two points, or 0.1%, to end at 1,864. 

Source: Western Union website

Western Union took a steep 5% tumble on Thursday after news that Wal-Mart is encroaching on its market. The $250 billion Wal-Mart, the largest private employer in the U.S., announced that it will offer its own money transfer service at more than 4,000 domestic locations next week. Vowing to undercut the fees of competitors like the $8.3 billion Western Union, the retail giant represents a major threat that shareholders fully recognized today. Not only is Wal-Mart pervasive in the U.S., but it has an international presence, which could threaten Western Union's long-term business, as well.

BB&T stock lost 3.6% today, as a slump in mortgage origination hit revenue, which fell nearly 7%. While net income jumped nearly 140% from the same period last year, earnings per share, coming in at $0.69 in the first quarter, just didn't cut it for Wall Street, which expected an EPS of $0.70. Net interest margin, a key metric of bank profitability, fell from last quarter, as BB&T had to shift capital to its investment portfolio due to liquidity rules.

Finally, shares of IBM, the second heaviest-weighted component in the Dow, shed 3.3% on Thursday. Revenue fell at the tech giant for an eighth-straight quarter, slumping 4% from the first quarter of 2013, and investors recoiled at the sales miss. Profits were right on target, as EPS came in at $2.54 for the period, but CEO Ginni Rometty said many of the company's investments would be long-term projects. Wall Street tends to abhor long-term projects if they don't play out quarterly. What's overlooked in this obsession over quarterly results is that long-term projects often end up being the most profitable. Areas like big data analytics, the cloud, and artificial intelligence could end up being these long-term payoffs for IBM, but its inability to capitalize on these investments more immediately is starting to wear on shareholders.

Three stocks to own for the rest of your life
As every savvy investor knows, Warren Buffett understands long-term investments, and he didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

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

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.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2920444, ~/Articles/ArticleHandler.aspx, 8/29/2015 9:57:42 PM

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...

John Divine

Fool since 2012, unique fingerprints since birth. Age 7: Put lifetime savings ($18.37!) in the bank, became disillusioned with low interest, and a fascination with the stock market was born.

Today's Market

updated 1 day ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 4:55 PM
^GSPC $1988.87 Up +1.21 +0.06%
S&P 500 INDEX CAPS Rating: No stars
BBT $37.10 Down -0.13 -0.35%
BB&T Corp CAPS Rating: *****
IBM $147.98 Down -0.56 -0.38%
International Busi… CAPS Rating: ****
WU $18.56 Down -0.03 -0.16%
Western Union CAPS Rating: ***