Please ensure Javascript is enabled for purposes of website accessibility

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

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

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

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

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/23/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.