Among the biggest losers in Monday's early trading are
Delcath (
DCTH
)
,
CVS Caremark (
CVS
)
and
Coldwater Creek (Nasdaq: CWTR)
.
|
Top Percentage Losers -- Monday, June 7,
2010
|
|
Company Name (Ticker)
|
Intra-Day Price
|
Intra-Day
% Loss
|
52-Week High
|
52-Week Low
|
| Delcath (Nasdaq: DCTH) |
$12.80 |
-12.6
%
|
$16.45 |
$2.71 |
| CVS Caremark (
CVS
) |
$31.53 |
-6.7%
|
$38.27 |
$27.38 |
| Coldwater Creek (Nasdaq: CWTR) |
$4.51 |
-5.9
%
|
$9.20 |
$4.14 |
|
*Table includes companies with minimum market
capitalizations of $200 million and three month trading
volumes of at least 100,000 shares. All percentage returns
are listed as of 10:45AM Eastern Standard Time . Click on
ticker symbols for up-to-the-minute price quotes and
percentage gain data.
|
Biotech Investors are Dubious of Delcath
Although many biotech firms are seeing nice gains on Monday after
this weekend's annual ASCO cancer conference, shares of
Delcath (Nasdaq: DCTH)
are plunging more than -12% after the company conceded its
promising drug delivery system can also prove very toxic and
perhaps lethal if it is not administered correctly. That raises
concerns that approval by the U.S. Food and Drug Administration (
FDA
) would prove very challenging, and even if approved, might come
with heavy restrictions that limit the potential market size for
its product.
Delcath has competed key clinical trials and now awaits word from
the FDA. Investors could eventually reverse their negative
reaction, as the drug delivery system did yield pretty impressive
efficacy data.
Action to Take -->
Keep an eye on this story as it develops. If it increasingly looks
like the FDA will overlook the toxicity issues, then shares could
be in for a sharp upward spike. But don't look to bottom-fish these
shares just yet, as an FDA rejection would send shares even lower.
As with many biotechs, this is a high risk/high reward situation.
Other biotech stocks that are off this morning due to
poorly-received date at the ASCO conference include
Celldex Therapeutics (Nasdaq: CLDX)
and
Arqule (Nasdaq: ARQL)
.
-------------------------------------
CVS down on Walgreen Move
Shares of
CVS Caremark (
CVS
)
are down nearly -7% after drugstore rival
Walgreen (
WAG
)
announced plans to stop using CVS' pharmacy benefit manager (
PBM
) arm, Caremark, for any new customers. CVS merged with Caremark
three years ago, and many questioned whether the deal might lead to
lost business for CVS, as rivals would essentially be ceding some
profits to the merged entity. It may have taken longer than
expected, but that finally happened. Walgreen cited other reasons
for ending the relationship for any new clients, but no amount of
spin could obscure the real reason. Some speculate that
MedcoHealth Solutions (
MHS
)
might win the contract from Walgreen. Shares of Medco are up nearly
+4% today.
CVS took a risk by merging with a PBM. The deal brought in clear
potential synergies, but those synergies would be lost if more
clients grow uncomfortable doing business with an ostensible rival.
Action to Take -->
At this point, the nearly $4 billion drop in CVS' value appears
well larger than the impact of the lost Walgreen business.
Investors are likely anticipating further pressures on the PBM
business. But the core drugstore business looks poised for
improvement as management is focusing on improving working capital
and boosting free cash flow at the chain. Wait for the dust to
settle, but shares are likely to climb higher in coming months if
no other PBM clients defect.
-------------------------------------
Coldwater Creek moves Deeper into Value
Territory
When we looked at
Coldwater Creek (Nasdaq: CWTR)
, on Thursday we suggested that shares were cheap but lacked any
near-term catalysts. Well, shares fell further on Friday and are
shedding another -6% this morning.
Action to Take -->
As mutual funds and other holders continue to steadily exit the
stock, it is pushing deeper into value territory. Further weakness
would have been justified if the retailer were faced with
open-ended losses or carried a lot of debt. That's not the case
here, and if you have a long-term view, shares should now hold
greater appeal as the price/sales ratio is by far the lowest of its
peer group, and improved merchandising or an improving employment
picture will eventually help to boost the sales and profit
picture.
-- David Sterman
Staff Writer
StreetAuthority
Disclosure: David Sterman does not own shares of any security
mentioned in this article.