Seven of the stock market's 10 sectors finished higher today, as a second day of testimony from Federal Reserve Chairwoman Janet Yellen served to assure investors that interest rates will remain low indefinitely. With that in mind, stocks seem to be the most appealing asset class, a fact that was of no comfort to shareholders in Express Scripts (ESRX +0.00%), Monster Beverage Corporation (MNST +0.06%), and Biogen Idec (BIIB 0.17%) today. These three stocks were three of the worst performers in the S&P 500 Index (^GSPC 0.87%) on Wednesday, even as the S&P itself added 8 points, or 0.4%, to finish at 1,981.
Pharmacy benefits manager Express Scripts managed to lose 3.1% today, despite few breaking developments that could be considered bearish. The biggest knock on the company from Wall Street's point of view was simply that Express Scripts hails from the health care sector, which was the worst performing sector in the stock market today. The company recently made changes to its coverage policy, dropping roughly 1,000 ingredients used in the compounding process, whereby two or more drugs are combined to create a customized medicine. This should help Express Scripts control costs in the long-run.
Monster is crushing it in the U.S., but can it take its dominance abroad? Image Source: Monster Beverage
Shares of the largest U.S. energy drink maker by volume, Monster Beverage, fell 2.9% today. Although buyout rumors are swirling and the usual talking heads are jabbering on about its potential acquisition, all that speculation hasn't even managed to send the stock higher recently, and Monster Beverage is actually on a three-day losing streak. Zooming out a bit, however, Monster does have a number of things going for it, as evidenced by its most recent blowout quarter. Consumers are losing their taste for sodas, yet energy drinks are becoming more popular than ever. Monster has a strong brand and great distribution in the U.S. and it's working on taking its empire global. Admittedly, shares appear a little frothy right now, but the underlying business is phenomenal.
The biotech industry has taken somewhat of a beating this week, and shares of Biogen Idec weren't immune to punishment on Wednesday, shedding 2.7%. Considering the contents of a report that accompanied Janet Yellen's testimony before Congress yesterday, today's losses aren't so shocking. The Fed's report specifically mentioned biotech stocks and social media stocks as being overvalued, an unusual comment for the central bank to make. While Biogen Idec's financial health appears to be perfectly acceptable, the stock, which trades at 37 times earnings, probably won't be the first one value investors look to for a bargain.
