The Greece-debt-resolution pendulum swung back in a bullish direction today, more or less, modestly pushing U.S. stocks to record highs on the first day back from a three-day weekend. Crude oil continued its recovery efforts too, advancing 1.5% and moving within reach of a new multi-week high.
It wasn’t a great day for all stocks, however. In fact, it was a particularly bad day for Gold Fields Limited (NYSE:GFI), 3D Systems Corporation (NYSE:DDD) and Cablevision Systems Corporation (NYSE:CVC). Here’s why.
3D Systems (DDD)
Just when it looked like 3D Systems Corporation shares were in a position to stop the bleeding and turn things around, yet another naysayer pointed out that the company — and the entire 3D printing industry, for that matter — isn’t seeing the kind of rampant demand for 3D printers an army investors were counting on just a couple of years ago.
Today’s near-6% drubbing of DDD stock was the result of a one-two punch combination of an article penned on Friday for Barrons.com and another one posted this morning at investing news website 24/7 Wall St. The former’s headline was a straightforward “3D Systems, Down 50%, Still Has Far to Fall,” and the latter’s headline asked “Is It Over for the 3D Printing Stocks?” The 24/7 Wall St. write-up didn’t directly answer the question, but merely asking it and underscoring all the woes 3D Systems and peers have suffered of late was enough.
As for the Barrons article, in it author Alexander Eule quotes Kase Capital Management’s Whitney Tilson saying of all 3D printer stocks “All the momentum guys are gone…yet it hasn’t fallen enough for any sensible value investor to want to own it. On any metric, the stock remains wildly overvalued.”
Investors, unable to make any sort of cogent counterargument, decided to dump DDD stock on the heels of Tilson’s assessment.
Gold Fields Limited (GFI)
It wasn’t the only gold mining stock to tank today, but Gold Fields Limited was the biggest loser among the major names in the business. When all was said and done, GFI stock lost 9% of its value on Tuesday. That drop brings the three-day decline to a total pullback of 20%.
The company didn’t do anything wrong, per se, other than being in the gold mining business.
The profitability of mining gold is almost entirely a function of the price of gold, and with gold hitting a new multi-week low today, traders were more than willing to keep shedding their Gold Fields Limited positions. As of the latest price, gold futures were at $1,208 per ounce, down 1.8% for the session, and off nearly 8% from their late-January peak.
Cablevision Systems (CVC)
Last but not least, Cablevision Systems Corporation shares took a 4% hit on Tuesday following a surprisingly dire downgrade of the stock.
UBS Warburg now rates CVC stock a rarely seen “sell”, versus its previous “neutral” rating, due to customer defections from its cable and telephone business in addition to the likelihood Cablevision Systems will need to spend heavily this year to support its new WiFi-only service. UBS suggests CVC stock is worth $17.50 per share — roughly 12% below today’s closing price.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
