Why Regeneron Pharmaceuticals, Inc., Fastenal Company, and Xilinx Inc. Are Today’s 3 Worst Stocks

The stock market hit fresh highs today, as the S&P 500 Index (SNPINDEX: ^GSPC  ) finished at an all-time closing record for the third-straight day. Although investors were mostly bullish on Tuesday, the telecom and consumer services sectors ended as notable laggards. So did shares of Regeneron Pharmaceuticals, (NASDAQ: REGN  ) , Fastenal Company (NASDAQ: FAST  ) , and Xilinx (NASDAQ: XLNX  ) , which underperformed significantly today. The S&P, for its part, eked out a 0.8-point advance, closing at 1,897. 

Regeneron Pharmaceuticals lost 2.7% today, as the biotech stock continued to slide in the wake of its recent first-quarter report. I can understand why Regeneron shareholders might be a little confused with the market's reaction to the results, since the company beat both revenue and earnings expectations. The concern, however, is with U.S. sales of the company's popular macular degeneration product Eylea, which posted lower growth than expected. A secular shift out of the richly valued biotech industry is also working against shares.

Shares of Fastenal, which hawks industrial and construction supplies, shed 2.3% Tuesday. The company, which is primarily a wholesale operation, enjoys gross margins higher than 50%, is financially stable, and dishes out a 2.1% annual dividend. There isn't a compelling catalyst behind today's stumble, but a troubling longer-term trend can indeed be seen in the company's financials. Fastenal sales grew by 17.6% in 2010 and 21.9% in 2011, but revenue growth has been decelerating since then, growing by just 6.1% last year. 

Source: Xilinx website

Finally, Xilinx tumbled 2.2% on Tuesday, as shares of the chipmaker broke a four-day winning streak. Xilinx also pays a dividend, shelling out 2.5% a year, but it hasn't been quite as consistent as Fastenal in recent years. Sales in the 2014 fiscal year were nearly equivalent to those in 2011, and investors are rightfully concerned with the company's sustainable competitive advantage. Technology companies have to consistently invest in research and development to keep up with the competition, but it helps when those investments evidence themselves in the form of sales growth.

The biggest thing to come out of Silicon Valley in years
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.


Read/Post Comments (0) | Recommend This Article (1)

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: 2956327, ~/Articles/ArticleHandler.aspx, 9/16/2014 5:41:12 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...


Advertisement