Why The Priceline Group Inc., Edwards Lifesciences Corp., and Citigroup, Inc. Are Today’s 3 Worst Stocks

Acquisitions, growth assumptions, and potential federal lawsuits plague these three stocks today

Jun 13, 2014 at 7:01PM

Investors got back into the buying spirit on Friday, sending nine out of 10 sectors higher, as all three major U.S. indices gained ground today. On Wednesday, the World Bank revised the estimate for global growth in 2014 lower, to 2.8% from 3.2%, and yesterday's sectarian violence in Iraq sent stocks plunging, yet again. But on Friday, those fears were largely dismissed or ignored by Wall Street, and the S&P 500 Index (SNPINDEX:^GSPC) added six points, or 0.3%, to end at 1,936. The Priceline Group (NASDAQ:PCLN), Edwards Lifesciences Corp. (NYSE:EW), and Citigroup, (NYSE:C), however, each finished the day in the red, ending as some of the worst stocks in the benchmark index.

The Priceline Group was Friday's single largest laggard in the S&P 500, tumbling 3%. Priceline didn't make a costly PR gaffe, or receive any damning analyst downgrades; Wall Street punished the stock merely because it acquired restaurant-booking website OpenTable for $2.6 billion. In fairness, Priceline did pay a hefty premium for its stake -- a 46% premium to Thursday's closing price, as a matter of fact -- but in return, Priceline diversifies its business and gets a company that's nearly tripled its annual sales since 2009.

The only sector of the markets that didn't gain ground today was the health-care sector, where medical appliances manufacturer Edwards Lifesciences makes its bread and butter. The stock shed 1.9% on Friday, as investors continued to punish the company for saying that its growth will likely be affected by competition this year. The silver lining is that the company, which specializes in making devices that treat heart ailments and disease, sees industry-beating growth beginning in 2015. Edwards Lifesciences also just received a $1.1 billion patent infringement settlement from rival Medtronic last month, so investors can be thankful for a big payout and, of course, fewer legal fees in the future.


Source: Public domain

Finally, shares of Citigroup lost 1.4% today after reports that the Justice Department is preparing to sue the company for its role in selling mortgage-backed securities that went sour, causing a ripple effect that helped to create the financial crisis. In what must be one of the most dysfunctional love/hate, public sector/private sector relationships in history, Citigroup received $476 billion in cash and guarantees during the financial crisis to keep it afloat. Today's reports allege that the bank refused to pay more than $4 billion to the Justice Department during negotiations for its role in the economic collapse.

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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 OpenTable and Priceline Group. The Motley Fool owns shares of Citigroup, Medtronic, and Priceline Group. 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. 

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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." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

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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