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Why 3D Systems, Clean Energy Fuels, and Buffalo Wild Wings Tumbled Today

By Dan Caplinger - Feb 5, 2014 at 7:31PM

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Stocks managed to climb back from earlier big losses, but these three stocks posted substantial declines today. Find out why here.

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

At first glance, it looked like the stock market might give up all of its gains from yesterday, with stocks coming out of the gate with a big decline near the open. But throughout the day, the market clawed its way back, finishing with only modest losses. However, that didn't help shareholders in 3D Systems (DDD -6.38%), Clean Energy Fuels (CLNE -2.21%), or Buffalo Wild Wings (BWLD) avoid substantial losses on Wednesday.

3D Systems (DDD) plummeted 15% after the 3-D printing specialist issued a profit warning in its preliminary full-year 2013 results. The company said that revenue would fall within its previously guided range, but it reduced its guidance range for adjusted earnings, with the new midpoint of $0.85 per share representing a 13% drop from the midpoint of its previous expectations. Yet even though consumer demand has been a problem for 3D Systems, the company's products are still popular among industrial customers. Even though the industrial side of the business arguably has more intense competition, today's news shows that 3D Systems will need to succeed on both industrial and consumer applications in order to make the most of the huge opportunity that 3-D printing offers.

Clean Energy Fuels (CLNE) dropped 14%. Many traders blamed a negative assessment of the company on Seeking Alpha for the downward action today, but another more general concern involves the soaring price of natural gas lately. Given that the whole basis for Clean Energy Fuels' business model hinges on it being cheaper for transportation companies to use nat-gas as a fuel rather than oil-based fuels, rising nat-gas prices could dissuade users from converting. That would threaten the company's existence, even though natural gas would have to rise further from current levels to eliminate the potential cost advantages for commercial users.

Buffalo Wild Wings (BWLD) fell almost 10% after reporting earnings last night that included a 12% rise in revenue and same-store sales increases of 5.2% at company-owned restaurants and 3.1% in franchise locations. Even though CEO Sally Smith said that she still expects Buffalo Wild Wings to post 20% earnings growth this year, shareholders wanted even faster growth from the restaurant chain. Despite an early rise right after the announcement, investors changed their mind after more-cautious comments in the conference call led them to second-guess their optimism. The stock's move shows just how much investors expect from high-growth prospects in today's shaky market environment.

Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends 3D Systems, Buffalo Wild Wings, and Clean Energy Fuels and owns shares of 3D Systems and Buffalo Wild Wings. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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

Clean Energy Fuels Corp. Stock Quote
Clean Energy Fuels Corp.
$7.52 (-2.21%) $0.17
3D Systems Corporation Stock Quote
3D Systems Corporation
$11.44 (-6.38%) $0.78
Buffalo Wild Wings, Inc. Stock Quote
Buffalo Wild Wings, Inc.

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