This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Five Dumbest Things on Wall Street: May 11

5. Body Gets Bopped

Talk about a body blow.

Shares of Body Central (BODY) got floored last Friday, sinking from $29 a share to $15 after the young women's clothing seller disappointed Wall Street with its second quarter and full-year earnings guidance. Prior to its earnings release late Thursday, the stock was a market champion, up 16% year-to-date and fresh off its 52-week high of $30.93.

Seriously, not since Rocky broke Apollo Creed's rib have we seen a crowd favorite suffer such a massive gut-shot.

Here's how it all went down.

The bout, or in this case, the earnings call, started out fairly well for Body Central CEO Allen Weinstein. The company announced in-line results with profit rising 10% and revenue up 12%.

So far so good. Right? Weinstein is in the ring, mixing it up and landing punches.

Unfortunately, things quickly went downhill for the champ from there, just like they did years ago when "Iron" Mike Tyson unexpectedly got stung by James "Buster" Douglas. The retailer announced a seriously negative same-store sales outlook, and then a second-quarter earnings forecast that fell a dime short of analyst expectations.

Finally, when the company offered up a full-year outlook that was 18 cents light of Wall Street's average estimate, it was lights out.

Down goes Weinstein! Down goes Weinstein!

After that knockout punch, the crowd turned on Body Central and boy, did it get ugly. Sellers unloaded the stock in droves, and Wall Street's analyst community, who were almost completely in the company's corner before the call, totally abandoned it.

"We now believe that original expectations of an isolated, quickly fixable merchandise miss in the first quarter may have morphed into an issue that could take several quarters to remedy," said William Blair analyst Sharon Zackfia, as she downgraded the stock to market perform from outperform.

Similarly, Piper Jaffray analyst Jeffrey Klinefelter lowered his rating to neutral from overweight saying the apparel recovery cycle "could present a nearer-term headwind for Fast Fashion retailers."

Wow! Thanks a lot guys for the timely advice. The stock gets absolutely flattened and now you change your opinion?

Heck, let's drop the boxing analogy. These jokers couldn't predict the winner of a professional wrestling match.

1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
BODY $0.14 0.00%
GOOG $565.06 0.00%
GMCR $115.05 0.00%
JPM $62.60 0.00%
S $5.27 0.00%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs