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Thanks to a couple of positive global cues, the market is trending marginally high. However, today, I am going to take a look at the laggards of the market. Even in the green market, there are stocks hitting their nadir.
Touching or creating a 52 weeks low price point is a major indicator for any stock. Except a few occasions, hitting 52 weeks low generally does not bode well for any stock. This is especially true in the case of declining stocks in an otherwise up market. If a stock is going against the broad market to touch the base price point, then you can rest assured that the particular stock has fundamental issues and it is advisable to liquidate your position in that stock. It may be the precursor of dwindling revenue, tighter margins or increasing costs. In order to keep your portfolio in healthy shape, it is imperative that you keep an eye out for the stocks hitting their 52 weeks low. So, let’s take a look at the stocks that have taken a plunge today:
Bebe Stores Inc. (NASDAQ:BEBE): The stock hit its 52 weeks low at $4.97 in today’s trading session. The stock slightly recovered and is currently trading at $5.00, down 0.99 percent from its previous close of $5.05. Late last month, Bebe Stores reported dismal financial results for the fiscal fourth quarter of the year and the effect was promptly seen on the stock market. The company reported 36.2 percent decline in its net income for the quarter, while its revenue for the quarter declined 0.6 percent. The worries about the company’s future are further compounded by the fact that it issued below par outlook for the fiscal first quarter of the current year. Bebe Stores expects to suffer a loss of a cent per share for its Q1. Its most optimistic forecast for the quarterly income stands at 4 cents per share. Since, the forecast is below the street expectation, today’s decline does not come as a surprise. The company’s revenue is likely to slack due to higher competition and lower promotional expenditure. Bebe Stores cut down its promotional activities. Equity analysis firm Wedbush slashed the price target for the stock to $5.50, down from its earlier target of $6. And as if all these news were not enough, the company president Emilia Fabricant tendered the resignation last month, passing further blow to the ailing company.
Ceragon Networks Ltd. (NASDAQ:CRNT): The stock continues its downward spiral and it shows no signs of abating. It is currently trading at $5.18, down 4.25 percent from its previous close of $5.41. During the trading session, it created a new 52 weeks low of $5.14. The company provides wireless backhaul solutions for cellular operators. Ceragon Networks had been creating new 52 weeks low from last couple of weeks. The company reported its latest Earnings per Share at dismal -$0.54, while its market capital stands at $189.39 million. Its 52 weeks high price is $10.83 and the stock is already 50 percent down from its top price level. The company fortunes have been hit by gloomy economic environment in Europe and the US. Ceragon Networks executive confirmed that its slowing business in markets like Europe and the US is likely to have deep negative impact on its bottom line. With no good news on the horizon and reduced forecast, I would like to stay away from this stock.
Lam Research Corporation (NASDAQ:LRCX): The semiconductor company is going through a rough patch, which is not surprising, given the fact that entire semiconductor sub-segment is reeling through a tough phase. The stock plunged to its 52 weeks low of $31.93 in today’s trading session. Currently, it is at $32.75, down 2.8 percent. This $3.93 billion company received a rating downgrade from Citigroup. Citi rates the stock as ‘Neutral’, down from its previous recommendation of ‘Buy’. The price target for the stock was also slashed down to $34 per share. The company is a victim to the overall sluggishness in semiconductor market. One of its main customers, Samsung is likely to make deep cuts in its production plans as it is rumored that Apple would be taking some of its orders away from the Korean company. The production cut will have direct impact on Lam’s bottom line. The company also strained its financial position with the purchase of Novellus. Though, I am not ready to create any position in Lam anytime soon, but I sure would be watching this stock closely.
