Why NVIDIA Corporation, Consolidated Edison, Western Digital Corp. Are Today’s 3 Worst Stocks

Despite quarterly earnings beats, solid growth, and high dividends, these three names ended as the worst in the stock market today

May 9, 2014 at 7:43PM

Stocks headed into the weekend on a strong note, as all three major indices ended higher and the Dow finished at an all-time closing high. Although Wall Street polished off the week with gains, there wasn't an overwhelming, undeniable sense of bullishness; in fact, just less than 54% of stocks managed to advance. Not included in that 54% were today's three most miserable performers: NVIDIA Corporation (NASDAQ:NVDA), Consolidated Edison (NYSE:ED), and Western Digital Corp. (NASDAQ:WDC), each of which ended near the bottom of the S&P 500 Index (SNPINDEX:^GSPC) on Friday. The S&P, for its part, tacked on two points, or 0.2%, to end at 1,878. 

For being one of the S&P's most severe decliners, NVIDIA's stock should count its blessings. Today's 2.4% setback is the sort of swing you see in the stock market every day, and it even came after the graphics company reported a pretty solid quarter of results. Sales in the first quarter agreed with analyst expectations at $1.1 billion, and earnings per share actually clocked in more than 50% higher than consensus forecasts. Still, Mr. Market is somewhat skeptical that NVIDIA can continue to flourish, since its GPU segment exposes it to the struggling PC market. 

Consolidated Edison

Source: Company website

Quite often when the stock market enjoys broad gains, more conservative investments struggle, leaving bonds and other income investments lagging behind. Within the stock market, this means that companies with predictable, sturdy results and high dividends get the short end of the stick, as investors take a "risk-on" mentality. It was Friday's tolerance for risk that sent shares of Consolidated Edison 2.1% lower, as the utilities sector ended as the day's worst performer. It's tough to understand why shares took the beating they did today, because the company not only pays a handsome 4.4% dividend, but also crushed quarterly earnings expectations.

Finally, shares of Western Digital Corp fell 2% on Friday. Last week, the data storage company, along with shares of its competitor Seagate Technology, each tumbled, as the businesses reacted to quarterly results. Both stocks topped earnings estimates, but forecast lower sales in the coming quarter than Wall Street expected. Western Digital's market share in the disc-drive market also edged somewhat lower, to 44.1%, while the average selling price of its products continued to trend lower.

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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 Nvidia. The Motley Fool owns shares of Western Digital.. 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.

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." 

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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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