These three companies did not live up to Mr. Market's expectations last week. Sometimes an earnings stumble is a signal to sell, but digging in the dirt is also a good way to find turnaround candidates while they're getting beaten down.
Today we're going to coo, "Free China!" Yes, really.
I am the walrus
First, the cooing: The analyst consensus said that Cooper Companies
No, the shortfall came from a tripartite combination of currency exchange rate fluctuations, integration costs related to the merger with Ocular Sciences, and more aggressive new product launches than originally planned. Trial lenses and marketing don't come cheap, you know.
But there's an upside to the downside. The heavy marketing blitz stole a little bit of market share from rivals like Johnson & Johnson's
What we have here, then, is a company in transition. The stock price is crawling around at a five-year low, and management doesn't seem to have full visibility into its own near-term plans.
On the other hand, I like the clarity and ambition you see in the long-term plan. The situation doesn't scream "Buy!" but it is whispering, "Have a closer look." Maybe a few of my readers with a better grasp of the lens market could contribute some wisdom in Motley Fool CAPS to give me -- and everyone else -- a better view of the big picture. Yes, that could be you. Right this way.
Free as a bird
Then, it's time for freedom: Dry-bulk shipper FreeSeas
On the other hand, I look at FreeSeas and can't help but think of rival DryShips
Finally, we're going Chinese: Chinese software maker CDC Corp.
A company that once made solid profits from online gaming and cell-phone services has now turned to enterprise software for bragging points. Rivals like Shanda Interactive
The company wants to go across the sea for new high-growth markets, selling games to American consumers next year. I'm not going to hold my breath waiting for a runaway success story in this mature market. And neither should you.
We hope you have enjoyed a magical mystery tour of real-language tickers with this Fool on the hill. Some of these underperformers are victims of larger circumstances, while others might have only themselves to blame. It's up to you to decide which down-on-their-luck companies should be able to pull themselves up by the bootstraps, and which ones are stuck in the mud for real.
Further Foolish reading:
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Fool contributor Anders Bylund holds no position in the companies discussed this week, apart from the previously disclosed contact lens inventory. Johnson & Johnson is a Motley Fool Income Investor pick and Shanda is a Rule Breakers pick. The Fool has a clear, focused disclosure policy.