Among the biggest losers in Tuesday's early trading are
Micron Technology (NYSE:
MU
)
,
Baidu.com (Nasdaq:
BIDU
)
and
Barnes & Noble (NYSE:
BKS
)
.
|
Top Percentage Losers --Tuesday, June 29,
2010
|
|
Company Name (Ticker)
|
Intra-Day Price
|
Intra-Day
% Loss
|
52-Week High
|
52-Week Low
|
Barnes and Noble
(NYSE:
BKS
) |
$13.74 |
-
16.3%
|
$28.78 |
$13.58 |
| Micron Technology (NYSE:
MU
) |
$8.76 |
-12.6
%
|
$11.40 |
$4.55 |
| Baidu.com (Nasdaq:
BIDU
) |
$69.37 |
-
6.8%
|
$82.29 |
$26.80 |
|
*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 10:30AM Eastern Standard Time . Click on
ticker symbols for up-to-the-minute price quotes and
percentage gain data.
|
Micron's Mixed Bag
Shares of
Micron Technology (NYSE:
MU
)
are trading down -12% this morning after the memory chip maker
delivered decent results on Monday evening, but a slightly cautious
near-term outlook. Shares had looked set to open with more modest
downside, but a Tuesday morning rout in the Nasdaq is really
sinking this boat. For a fuller look at Micron's quarter, and its
impact on the peer group,
please click here
.
------------------------------------
Baidu gets Company (again)
"Nothing good lasts forever." That's the sentiment being expressed
by investors in
Baidu.com (Nasdaq:
BIDU
)
this morning. When
Google (Nasdaq:
GOOG
)
got into a very public spat with the Chinese government, and
eventually exited the Chinese search market, Baidu.com quickly saw
its
market share
surge. That helped boost shares from around $12 to above $80 in
just 18 months.
So when you see a headline that Google is looking to make amends
with the Chinese government, you know that Baidu.com investors
can't be happy. They are pushing shares down -6% on Tuesday, but if
history is any guide, they have further to fall.
Not only would Google steal back some sales momentum, but concerns
are also mounting that the Chinese economy may be starting to cool.
Baidu.com would still be able to pound out impressive growth, as
Internet penetration rates should keep rising, but
currently-forecasted growth rates might be unachievable. Analysts
currently expect sales to rise nearly +70% this year, and another
+50% in 2010.
Action to Take -->
Analysts may need to ratchet back down their earnings forecasts,
which had been sharply rising recently. Lower projected earnings,
coupled with a more sober target
price-to-earnings ratio (P/E)
multiple, could push shares back down toward the $60 or even $55
mark. It's hard to short a momentum stock, but Baidu.com looks to
be losing its momentum.
------------------------------------
Barnes & Noble's Rose-Colored Glasses
Shares of
Barnes & Noble (NYSE:
BKS
)
are off -15% after the nation's largest retail bookstore chain
delivered impressive quarterly sales results but a
larger-than-expected loss on Monday evening guidance. Of greater
concern, the forward outlook was disappointing. Management intends
to heavily invest it its website and e-reader business, which will
lead to a drop in earnings before interest, tax,
depreciation
and amortization (EBITDA) in the coming
fiscal year
, and a likely
GAAP
loss.
Betting the ranch on digital books is a risky move. As we noted in
this column, Barnes & Noble may be ill-equipped to compete with
Amazon.com (Nasdaq:
AMZN
)
in the online categories. If history is any guide, Amazon, will
sacrifice near-term profits in order to create profit woes for BKS.
That could lead BKS to eventually scale back its digital
initiatives, providing Amazon.com with a long-term competitive
moat.
And an increased emphasis on digital books means that sales may be
negatively impacted by piracy, as has happened in the music
industry over the last decade. Book readers tend to be a better and
older demographic than music buyers, so the piracy levels won't be
as high, but they could still eat away at core growth rates.
Action to Take -->
Barnes & Noble has no choice but to play offense here, but does
not look to have the strongest hand. Despite hitting a new 52-week
low, there's no need to bottom-fish. Shares are unlikely to fall
below the $12 mark, though, as the company's considerable retail
footprint still holds appeal.
-- David Sterman
Staff Writer
StreetAuthority
Disclosure: Neither StreetAuthority, LLC nor the David Sterman
hold positions in any securities mentioned in this report.
StreetAuthority