Please ensure Javascript is enabled for purposes of website accessibility

Why Did My Stock Just Die?

By Rich Duprey - Updated Apr 6, 2017 at 11:21PM

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

These stocks just rolled over. Can they bounce back?

Your stock just took a nosedive -- but don't panic. First, let's see whether it had good reason to fall. Sometimes, panic-fueled drops can make excellent buying opportunities. Here's the latest crop of cratered stocks that could provide a possibility for profit:

Stock

CAPS Rating (out of 5)

Past Week's Change

EnerNOC (Nasdaq: ENOC)

****

(24.81%)

MannKind (Nasdaq: MKND)

**

(23.52%)

Microvision (Nasdaq: MVIS)

***

(17.41%)

Although it may have felt like two steps forward, one step back at times, the market has risen more than 1% over the past week. Investors have ignored rising inflation and higher jobless claims, preferring instead to focus on an ebullient manufacturing report. Given Wall Street's general cheeriness, stocks that have fallen by larger percentages are even bigger deals.

The devil's in the details
The smart grid isn't quite proving itself dumb, but it's not exactly at the head of the class. Electricity demand response leader EnerNOC has been tripping over itself to win the dunce award, first by getting caught up in charges that it's double booking energy savings, then by the abrupt resignation of its COO -- unrelated, it says, to the accounting issue. It then reported wider quarterly losses as revenues fell and costs rose.

Demand-response aggregators like EnerNOC and Comverge (Nasdaq: COMV) assist consumers and businesses in remotely reducing their electrical consumption during peak demand periods. In return, utilities and grid operators pay them for reducing the overall demand on the grid.  Smart meter maker Itron (Nasdaq: ITRI) is perhaps one of the better-known companies helping residential consumers make more informed energy choices. But PJM, the largest grid operator, accused certain aggregators of "engaging in market manipulation." It didn't name any particular company, but EnerNOC accounts for 35% of PJM's demand response market.

CAPS member MajorBob04 was disappointed by EnerNOC's earnings, but All-Star TMFCandyMountain says it's a long-term play: "Stock getting beaten up, perhaps for good reason. This long pick is based on the belief, or dare I say hope, that there won't be permanent reputational damage with its customers."

Let us know on the EnerNOC CAPS page whether it will be able to power up again in the near future.

A coming meltdown
The unkindest cuts to MannKind just keep on coming. The FDA threw the biotech for a loop by issuing a second complete response letter that calls for MannKind to run more tests on Afrezza, its inhaled insulin drug. The FDA's initial letter didn't require any additional tests, but MannKind might have brought that step on itself by changing its manufacturing setup.

Investors shouldn't be surprised that MannKind laid off employees as a result. Perhaps it was the magnitude of the layoffs -- 40% of the total staff -- that sent the stock into a tailspin. Management also had to halt its human insulin supply agreement with Merck (NYSE: MRK), costing the biotech $22.7 million more in termination fees. Yowch!

CAPS member Charlie9665 thinks MannKind will have a hard time going up against the new realities of a more cautious FDA: "It's not working will with FDA, an the FDA is looking at new medications more closely and not granting approvals, but more trials."

Let us know in the comments section below or on the MannKind CAPS page how long you this stock can hang on before succumbing.

That sinking feeling
Admittedly, I've been infatuated with the potential of pico projector maker Microvision. While rumors have swirled that its technology will find its way into this Apple (Nasdaq: AAPL) product or that, the company forged a more concrete deal with Pioneer to incorporate its PicoP laser technology into its transparent head-up displays found in cars and consumer products, and started working with videogame maker Capcom and chipmaker Intel to take gaming to the next level.

So when Macrovision said fourth-quarter losses would nearly double, prompting the company slash personnel, it was a surprise to say the least. That hardly sounds like the performance of a growing, innovative company. Like me, pchop123 believes Microvision still has a lot of potential, but MajorBob04 chimes in here to say it's simple math: "Greater loss exceeding market expectations = lower price."

Add Microvision to your watchlist to see whether it will be able to project any growth in the future.

Ready for a resurrection
Just because your stock has taken a beating doesn't mean it's going to roll over and die. Markets are known for overreacting. A closer look at what's happened to your stock can give you an edge over other investors who just react to the market's lead.

That's why it pays to start your own research on these stocks on Motley Fool CAPS where you can read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from the stock's CAPS page. Then you can decide for yourself whether it's ready to come back from the dead.

Intel is a Motley Fool Inside Value choice. EnerNOC is a Motley Fool Rule Breakers selection. Apple is a Motley Fool Stock Advisor recommendation. The Fool has written puts on Apple. The Fool owns shares of and has bought calls on Intel. Motley Fool Options has recommended a diagonal call position on Intel. The Fool owns shares of Apple, and EnerNOC. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in the article. You can see his holdings here. 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.

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

Apple Inc. Stock Quote
Apple Inc.
AAPL
$172.00 (-1.24%) $-2.15
Merck & Co., Inc. Stock Quote
Merck & Co., Inc.
MRK
$92.47 (1.18%) $1.07
MicroVision, Inc. Stock Quote
MicroVision, Inc.
MVIS
$4.88 (-8.00%) $0.42
EnerNOC, Inc. Stock Quote
EnerNOC, Inc.
ENOC
Itron, Inc. Stock Quote
Itron, Inc.
ITRI
$50.03 (-5.24%) $-2.77

*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 analyst team.

Stock Advisor Returns
397%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

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.