Why Express Scripts Holding Company, Exelon Corporation, Marathon Oil Corporation Are Today's 3 Worst Stocks

First-quarter GDP numbers were released today, and if you didn't know any better you'd think the country was back in recession mode. The U.S. economy grew at just a 0.1% pace in the first quarter, far below the 1.1% economists were expecting. But shareholders of Express Scripts (NASDAQ: ESRX  ) , Exelon (NYSE: EXC  ) , and Marathon Oil (NYSE: MRO  ) had bigger things to worry about, as each stock ended near the bottom of the S&P 500 Index (SNPINDEX: ^GSPC  ) today. The S&P, for its part, shrugged off the bad economic omen, adding 5 points, or 0.3%, to end at 1,833.

Shares of Express Scripts tumbled 6.2% as the health care plan provider gave stockholders nothing but a heavy dosage of dreadful news. It started off by reporting first quarter sales and earnings that missed Wall Street expectations. While the company's net income was about 3% below forecasts and revenue missed by a meager 0.5%, it also guided full-year earnings per share lower and announced that it was under investigation by the Feds. This, by almost any standards, was destined to be a very poor day in the stock market for Express Scripts. CEO George Paz stood up for the company, saying he was confident that investigations into the company's relationship with drugmakers would clear it of any wrongdoing.

Exelon Corporation also ended as one of Wednesday's biggest laggards, falling 3.2% in trading. The power utility bought Pepco, making Exelon the largest power distributor in the U.S. Usually acquiring companies see their stock prices fall when they offer to snatch up a competitor, since they're usually forced to pay a steep premium and invest significant resources in the acquisition, so today's plunge isn't anything out of the ordinary in that regard. A takeover of Pepco increases Exelon's exposure to government-regulated markets, making the combined company's cash flows more predictable, a move some investors saw as overly conservative and restrictive to future growth. 

Source: company website

Finally, shares of oil and natural gas company Marathon Oil dropped 2% on Wednesday, as oil and natural gas prices took a dive. Oil fell 1.5% and natural gas was down 0.3% today. Part of the stock market's reluctance to accept the Pepco deal had to do with the fact that the incredible affordability of natural gas has driven energy prices to unsustainably low levels. By keeping its beak wet in unregulated markets, Exelon could participate in a resurgence in energy prices. However, Marathon Oil is a prime example of how too much exposure to unregulated markets can work against you, since results are more prone to rising and falling energy prices. 

Read/Post Comments (0) | Recommend This Article (5)

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: 2938314, ~/Articles/ArticleHandler.aspx, 8/31/2015 9:26:30 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...

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 2 days ago Sponsored by:
DOW 16,643.01 -11.76 0.00%
S&P 500 1,988.87 1.21 0.00%
NASD 4,828.33 15.62 0.00%

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 +0.00%
S&P 500 INDEX CAPS Rating: No stars
ESRX $84.46 Down +0.00 +0.00%
Express Scripts CAPS Rating: *****
EXC $31.40 Down -0.32 +0.00%
Exelon CAPS Rating: ***
MRO $16.65 Down +0.00 +0.00%
Marathon Oil Corp CAPS Rating: *****