As the stock market continued to fall Thursday, largely due to the increasing anxiety and uncertainty involving the presidential election on Tuesday, some stocks dropped after reporting earnings, while generic-drug stocks slid on news of a Department of Justice probe.
Earnings reports as a whole have been solid this quarter, but as Election Day nears, company executives seem to be growing more conservative about forecasts, and Wall Street doesn't like what it hears.
Many market participants have been calling for a pullback over the past few months, and it is starting to look like we are in the midst of one. No one knows how bad it could get, but investors don't want to be caught owning the wrong stocks if it gets worse.
So let's take a look at three of Thursday's big losers.
1. First Solar (FSLR)
One of the biggest declines in the S&P 500 on Thursday was registered by First Solar, which skidded 15% and is down another 4%-plus on Friday.
The decline came after First Solar reported third-quarter results that beat analysts' earnings estimates but missed on revenue. Earnings came in at $1.22 a share, surpassing the forecast of 69 cents a share, while revenue was $688 million, well below the $967 million expected.
First Solar reported earnings of $3.41 a share on revenue of $1.3 billion a year earlier.
Low demand from China due to an oversupply in the market hurt the company during the quarter, and many analysts expect the challenges to continue. Customers are holding off on signing new contracts in the hopes that solar-panel prices will continue to decline.
Although First Solar may not be a buy right now, investors should watch the stock closely, as it may be a future opportunity.
2. Wynn Resorts (WYNN)
Another stock that got crushed on Thursday following a disappointing earnings report was Wynn Resorts.
Shares fell 9.3% after the company said that its Macau operations weren't performing as well as many had hoped and it posted third-quarter adjusted earnings of 75 cents a share, missing estimates by 3 cents a share.
The stock is up more than 1% on Friday.
Wynn Resorts did post revenue growth of 11% to $1.11 billion, up from $996.3 billion a year earlier, as the company's Las Vegas properties showed strength.
The company's second resort in Macau, Wynn Place, posted revenue of $164.6 million for the quarter, below the $169 million analysts expected. Wynn Place is cannibalizing Wynn Macau.
Wynn Resorts looks like a pretty big gamble, so investors should roll the dice at their own risk.
The slide followed news that the Justice Department is investigating the company, as well as other generic-drug makers for possible price collusion.
The probe into Endo International has reportedly been open for nearly two years. If the company is found culpable, fines could be handed down before the end of the year.
But as is the case with many of the generic-drug companies involved, Endo International has multiple drugs, so if collusion was occurring with one or two of them, the company should be able to weather the storm and recover over the long run. The bad news is that in the short term, the stock could get hit even harder than it was on Thursday.
Investors should stay away from this stock and those who already own shares should use the 3%-plus pop on Friday as an opportunity to get out.
The investing climate is scary right now. Here is a list of seven companies that you will profit from, regardless of what the markets do. With many calling for a coming crisis, now is the perfect time to make sure you and your portfolio are protected. Each one of these powerful, yet overlooked companies barely notices when the market tumbles. And they'll skyrocket when it rebounds. You can pick all seven up for pennies on the dollar right now. But that'll change the instant average investors catch wind of just how bad things really are. Get their names here before it's too late.