Why AeroVironment, Acorda Therapeutics, and Chicago Bridge & Iron Tumbled Today

Even though the stock market managed to post modest gains, these stocks missed out. Find out why.

Jun 17, 2014 at 8:33PM

Stocks generally gained ground Tuesday as investors remained confident despite some signs of challenges for the U.S. economy. Inflation spiked upward in May, and activity in the homebuilding market declined, raising some fears about the sustainability of some of the key drivers of the recovery during the past several years. Also weighing on market sentiment were negative news reports concerning AeroVironment (NASDAQ:AVAV), Acorda Therapeutics (NASDAQ:ACOR), and Chicago Bridge & Iron (NYSE:CBI), each of which posted substantial losses today.

AeroVironment fell more than 5% after an analyst downgraded the stock, reducing its former buy rating to a hold rating. The maker of unmanned drone aircraft has soared during the past year, with prospects for huge growth for new applications for drones ranging from package delivery to surveillance of corporate facilities in remote locations. Just in the past several weeks, AeroVironment shares have jumped 15% as approval of drone use for BP's Prudhoe Bay facilities, and the prospect of greater unmanned aerial vehicle use in a possible escalation of hostilities in Iraq, helped make investors more aware of the company's potential. Even after a modest pullback today, AeroVironment still has plenty of potential to reverse course and start giving shareholders gains again.

Source: AeroVironment.

Acorda Therapeutics dropped 9% after the biotech specialist in multiple sclerosis, spinal cord injuries, and other nervous-system disorders said it would offer convertible notes to raise capital. Acorda said that it would raise $300 million by issuing seven-year convertible senior notes. Pricing of the note offering hasn't happened yet, but the fear that investors have is that the conversion option will potentially dilute existing shareholders, especially if the stock is able to reach its full potential. Nevertheless, for companies whose best prospects lie well in the future, raising capital is a necessary risk that early investors run in exchange for the possibility of getting huge profits.

Chicago Bridge & Iron declined 7% after facing allegations from a small research firm of using "creative acquisition accounting." Ever since Chicago Bridge announced that it had won a contract from a Canadian energy-infrastructure company to help provide front-end engineering and design work on a liquefied natural gas export facility in Canada, the stock has moved downward. Yet, with more attention than ever on engineering and construction projects, especially in the booming energy sector, Chicago Bridge & Iron has a true opportunity for growth if it can capture its fair share of business from companies both within and outside the energy industry.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends AeroVironment. The Motley Fool owns shares of AeroVironment. 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." 

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.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

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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