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Why Polaris Industries, Amarin, and VimpelCom Slumped Today

By Dan Caplinger – Sep 12, 2016 at 6:31PM

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Even on a strong day for the market, these stocks lagged behind. Find out why.

Monday was a strong day for the stock market, and investors got their confidence back after concerns arose late last week about the prospects for a potentially faster string of interest rate increases from the Federal Reserve than most had expected. Various Fed officials made public statements during the day on Monday, and put together, their views seemed to support a greater likelihood that the central bank will choose not to jump into action at its meeting later in September. Major market benchmarks didn't earn back all of their losses from Friday's drop, but they nevertheless posted healthy gains of around 1.5%. Still, some individual companies didn't fare as well, and Polaris Industries (PII -2.05%), Amarin (AMRN -0.91%), and VimpelCom (VEON -4.79%) were among the weaker performers in the market today.

Image source: Polaris Industries.

Polaris stalls out

Polaris Industries fell 5% after the maker of all-terrain vehicles and other power-sports offerings revised its forecast for earnings for the full year. The company said it now expects its 2016 earnings to come in between $3.30 and $3.80 per share, which is $2.50 to $2.70 less than its previous guidance had suggested. About two-thirds of the shortfall will be attributable to the third quarter, and Polaris said the decline is largely due to additional problems with its RZR Turbo vehicle that required more extensive repair remedies than it had originally believed would be necessary. Related issues also led Polaris to delay the launch of some of its 2017 model year products, which could have a further impact. Polaris believes sales for the year will be down mid- to high-single-digit percentages, worse than the flat to down 2% range it had previously stated. Until the extent of the RZR problems is fully known, Polaris could have further downside risk.

Amarin keeps going

Amarin fell 7% in the wake of news that the biopharmaceutical company would continue its cardiovascular study of its Vascepa drug, following recommendations of the independent data monitoring company looking at the study. The double-blind phase 3 study is intended to determine whether Vascepa cuts the risk of cardiovascular events in patients with high triglyceride levels despite having been treated with statins in the past. Amarin made it clear that it had expected the trial to continue, but the drop in its stock price suggests that at least some investors had hoped the initial data would be enough to spur the independent panel to recommend more immediate action. Amarin expects final study results in 2018, and that might be the timeline investors need to expect before seeing further forward progress toward an approval.

VimpelCom makes an offer

Finally, VimpelCom dropped 7%. The telecom and digital services company said that major shareholder Telenor East Holding II would sell 142.5 million shares of VimpelCom stock in a secondary share offering, with the potential for underwriters to buy another 21.375 million shares as well. Because of the nature of the secondary offering, VimpelCom won't get any proceeds from the sale, and many investors saw the move as a vote of no confidence from Telenor. The sale will take Telenor's stake down from about one-third to roughly one-quarter, and it might also make offerings of bonds that investors can exchange for VimpelCom stock in the future. For Telenor, the deal raises valuable cash, but the temporary flooding of the market with shares could put short-term pressure on the stock for a while.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Polaris Industries. 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.

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Stocks Mentioned

Polaris Industries Inc. Stock Quote
Polaris Industries Inc.
$95.65 (-2.05%) $-2.00
Amarin Corporation plc Stock Quote
Amarin Corporation plc
$1.09 (-0.91%) $0.01
VEON Ltd. Stock Quote
$0.32 (-4.79%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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