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Stocks That Just Lowered the Boom

Rich Duprey
February 23, 2012

When a company forecasts lower sales or profits, its stock usually takes a hit. It's not always easy to tell whether your company is having a fire sale or burning down. Maybe it is time to get out -- or maybe it's time to buy more!

To help tell the difference, we pair up the dour guidance news with the sentiments of our Motley Fool CAPS community of more than 180,000 members. If the best stock pickers think the companies still have the power to turn lemons into lemonade, maybe investors should take notice.

Here are two stocks that have recently announced reduced guidance.


CAPS Rating
(out of 5)

Previous or Consensus Estimate

Current Guidance


RF Micro Devices (Nasdaq: RFMD  ) **** $0.03 ($0.02) Q4 '11
Zipcar (Nasdaq: ZIP  ) *** ($0.07) ($0.10) - ($0.12) Q1 '12

Don't blindly sell into the companies' bearish outlooks -- you still need to do some research. Use the announcements as a jumping off point for additional research.

Bad moon rising
Wireless chip maker RF Micro Devices' fourth-quarter growth is getting eclipsed by the Chinese lunar new year affecting order visibility, so it's forecasting greater-than-seasonal declines in sales to cellular handset manufacturers there. As China represents more than one-third of RF Micro's sales, it's going to experience a bulge in inventories just as sales are falling.

Triquint Semiconductor (Nasdaq: TQNT  ) also saw revenues fall in its quarter and offered up disappointing first-quarter guidance, though it didn't blame new year revelry.

The Fool's Anders Bylund sees emerging 4G opportunities as RF Micro's best chance for regaining momentum and market share, but it faces tough challenges from rivals like Skyworks Solutions. As a result, he dubs it a speculative, long-term play.

CAPS All-Star