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.
Investors took a break from the impressive gains that stocks have posted over the past several days, with major-market benchmarks inching downward by the smallest of margins. Yet despite the overall resilience of the market, WellCare Health Plans (WCG), ReachLocal (RLOC), and Jive Software (NASDAQ: JIVE) had their shares lose substantial amounts of value today, with earnings news driving all three of their stocks lower.
WellCare fell 9% as earnings came in below expectations despite a 23% jump in revenue for the health insurers. The big problem, though, is that WellCare anticipates a huge amount of added costs due to Obamacare in 2014, and so the company gave guidance that was 20% to 25% below previous forecasts for earnings per share this year. With so many other insurers also vulnerable to the vagaries of the Affordable Care Act, WellCare's performance today bodes ill for the industry as a whole.
ReachLocal plummeted 15% after shocking investors with a net loss in last night's report. Revenue climbed 11%, but that was less than most had expected. Moreover, with ReachLocal saying that it would boost spending this year and that revenue for the current quarter wouldn't match up to investors' hopes, the local-commerce company has some investors concerned that its focus area might not generate the growth prospects that it needs in order to justify its share price.
Jive Software finished the day plunging 19% after negative revenue guidance for the current quarter and full-year 2014 outweighed earnings figures that were close to what investors had expected to see. The seller of enterprise social-networking and collaboration software believes that it will be able to fend off competition and deliver superior products that its rivals can't match. Yet investors don't seem to be so sure, especially as Jive will have to beat out both established larger companies as well as new start-ups that will threaten it on both fronts.