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Why Teva Pharmaceutical Industries, Tivity Health, and Marine Products Slumped Today

By Dan Caplinger - Dec 10, 2018 at 4:35PM

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Learn what held these companies' stocks back on a choppy day for the market.

Wall Street went through another session of extreme volatility on Monday. Having fallen nearly 2% at earlier points in the day, the broad-based S&P 500 index finished fairly close to unchanged, with key sectors like technology helping to provide support to the overall market. Yet some stocks didn't manage to regain all of their lost ground from early in the session. Teva Pharmaceutical Industries (TEVA -0.24%), Tivity Health (TVTY -0.12%), and Marine Products (MPX 3.14%) were among the worst performers on the day. Here's why they did so poorly.

Generic worries hit Teva

Teva Pharmaceutical Industries saw its stock close lower by 5% on news that government regulators might take aim at expanding allegations of price fixing among manufacturers of generic drugs. A key lawsuit from several state attorneys general that initially focused on just a small number of drugs has reportedly expanded to cover hundreds of different treatments, according to The Washington Post, and allegations include high-priced meals and events at which key executives traded information to help their companies collude on prices for various drugs. Some investors fear that a probe could now result in greater attention from federal officials, and that could mean more risk for Teva and its peers.

Person in white lab coat and blue gloves holding a pill, with dozens of pills scattered on a glass table.

Image source: Getty Images.

Tivity makes a questionable buy

Tivity Health stock plunged 32% after the company announced a key strategic purchase. Tivity agreed to buy weight-loss giant Nutrisystem in a deal worth $1.4 billion, or $47 per share in total combining cash and stock. Tivity investors seemed to question the nearly 40% premium that the company paid for Nutrisystem, especially given the huge amount of competition in the nutrition and weight loss arena right now. Even if the purchase succeeds in giving Tivity greater penetration into weight management, it will still take a lot to justify the purchase price.

Marine Products takes on water

Finally, shares of Marine Products sank 22%. The company got downgraded by analysts at B. Riley FBR, who cut their rating from neutral to sell and set a price target of $16. The maker and seller of recreational fiberglass boats had seen substantial gains in its stock price throughout 2018, riding the wave of economic prosperity and rising interest in higher-priced boats and other recreational vehicles. Yet with some worrying about a possible slowdown in the U.S. economy, shareholders are less confident in Marine Products' sales prospects, and that's showing up in today's plunge.

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Stocks Mentioned

Tivity Health, Inc. Stock Quote
Tivity Health, Inc.
$32.18 (-0.12%) $0.04
Teva Pharmaceutical Industries Limited Stock Quote
Teva Pharmaceutical Industries Limited
$8.45 (-0.24%) $0.02
Marine Products Corporation Stock Quote
Marine Products Corporation
$10.50 (3.14%) $0.32

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

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