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Wednesday Losers: Hutchinson Retreats at a Bad Time
4/28/2010 11:59:00 AM
By: David Sterman
You'll often see all of the same companies within a similar
sector trade in tandem. That's why many investors buy stock in
company B after their rival, company A, blew past estimates. But
that logic failed to hold for investors in
Hutchinson Technology (Nasdaq: HTCH)
, which supplies subcomponents to disk drive makers such as
Seagate Technology (
Western Digital (
. Those firms are seeing robust demand, as we previously noted. But
Hutchinson had some manufacturing glitches that led its customers
to shift business to other vendors, leading to an unexpected loss
and a -20% swoon in its shares.
Whither our love affair with the buffalo wing? Even the most
diehard fans of the ubiquitous pub grub need to take a break, and
they did that in droves, as same-store sales at
Buffalo Wild Wings (Nasdaq: BWLD)
fell a few points in April, and foot traffic fell by more than -5%,
from a year ago. That sent shares, which have long been favored by
momentum investors, into a tailspin today, falling roughly -20%.
That's great news for short investors, who had held nearly a
quarter of the company's shares, according to recent data.
Unisys ( UIS ) is giving us another lesson in trading strategies. Shares sharply fell Tuesday as quarterly results badly missed forecasts. A sudden drop tends to bring out value investors in the next trading session on hopes that the selling is done. But many times, it can take a large fund several days to exit an investment, which appears to be happening with Unisys. After falling -20% Tuesday, shares opened slightly higher this morning, but have been in freefall ever since and are now down more than -5%. Shares could remain under pressure until the current shareholder base of technology investors washes out and the new base of value investors rolls in. And that could take some time.
-- David Sterman
Disclosure: David Sterman does not own shares of any security mentioned in this article.