Why Teradata Corporation, Transocean Ltd., and Denbury Resources Inc. Are Today’s 3 Worst Stocks

Forecasts, conference calls, and market forces conspired to make these three names the worst performers in the stock market today

May 8, 2014 at 7:57PM
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Weekly jobless claims numbers came out today and, although the number of people filing for unemployment insurance fell, the four-week moving average ticked higher for a third-straight week. While stemming the bleeding from the financial crisis has been the focus of the Federal Reserve for years, tepid employment growth is becoming a bigger focus at the central bank, which has vowed not to increase rates until significantly more Americans are back at work. Meanwhile, investors in Teradata Corporation (NYSE:TDC), Transocean Ltd. (NYSE:RIG), and Denbury Resources (NYSE:DNR) watched in pain as the trifecta ended at the bottom of the S&P 500 Index (SNPINDEX:^GSPC) today. The S&P, for its part, lost just two points, or 0.1%, to end at 1,875. 

Teradata Corporation finished as the worst performer in the 500-stock index on Thursday, slumping 10.1% on soft guidance. Looking at Teradata's first-quarter results in and of themselves, it's tough to find a flaw with the data analytics company, which crushed both sales and income expectations. Revenue came in at $628 million against forecasts for $615 million, while earnings per share of $0.54 easily topped the $0.47 Wall Street was looking for. Unfortunately, Teradata's robust first quarter made its weak full-year sales forecast stick out like a sore thumb, implying the company expects growth rates to taper off significantly. Competition from open-source competitors like Hadoop is still the elephant in the room, and Wall Street doesn't talk about elephants -- it trades on them.

Offshore oil and gas driller Transocean Ltd. also crushed expectations in its most recent quarter. Revenue advanced 7%, as profits soared 42% in the period, a blowout report that initially caused the stock to jump in after-hours trading yesterday. Transocean started Thursday on a great note, but shares gradually fell throughout the day and finished with 4.3% losses. A conference call with analysts this morning was the impetus behind the confusing, pop-then-drop behavior of Transocean's stock today. Executive Terry Bonno said that day rates of ultra-deepwater units "have shifted downward from the previous quarter to between $375,000 per day" and $500,000 per day, and that rates could continue to see pressure.

Denburynaturalresources

Source: Denbury Natural Resources website

Finally, shares of oil and natural gas company Denbury Resources lost 3% today, as the prices of those two commodities both fell on Thursday. Oil lost 0.5%, and currently trades at just more than $100 a barrel, while natural gas prices flat-out plunged, shedding 3.5% by day's end. It's a sobering reminder of just how dependent companies like Denbury remain on market forces quite outside of their control. Shareholders were reminded of that humbling fact today, just two days after the stock advanced as investors celebrated a first-quarter sales beat.

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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 Teradata. The Motley Fool owns shares of Denbury Resources and Transocean. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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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