Tech

Stamps.com shares drop Friday after loss of USPS partnership

Dan Caplinger, The Motley Fool
Published 6:40 p.m. ET Feb. 22, 2019

A good day for the market couldn’t save these stocks from big losses. Find out why.

Friday was a good day on Wall Street, as investors celebrated the prospects for a possible end to the U.S. trade war with China. The Dow Jones Industrial Average crossed the 26,000 mark, finishing with triple-digit gains and leading other major benchmarks higher as well. However, bad news from certain corners of the market held back some individual stocks. Stamps.com (NASDAQ: STMP), Campbell Soup (NYSE: CPB), and Diplomat Pharmacy (NYSE: DPLO) were among the worst performers. Here’s why they did so poorly.

Stamps.com gets canceled

Shares of Stamps.com plummeted 58 percent after the provider of online postage and shipping software released its fourth-quarter financial report. At first, the company’s earnings release merely said that its fiscal 2019 results would plunge from 2018 levels, with adjusted earnings declining from $11.78 per share in 2018 to just $5.15 to $6.15 per share in 2019. Later, it became apparent that the drop came in light of Stamps.com’s loss of its exclusive partnership with the U.S. Postal Service, which will open the door for competing mail services to sell online postage. Now, Stamps.com will have to find a way to redefine itself with other services to make up the gap, and that’s proven difficult for many of its peers.

CLOSE

Mailing a card or letter will cost more than ever starting Jan. 27.
USA TODAY

Campbell cools off

Campbell Soup saw its stock drop 7 percent. The food company said that it would sell a refrigerated soup plant in the state of Washington to private investment company Joshua Green, but what likely prompted the decline in the share price was news elsewhere in the industry. With shares of Kraft Heinz plunging by more than 30 percent due to sluggish business performance and worries about future growth, investors in Campbell didn’t hesitate to conclude that the soup giant faces many of the same potential pressures. Activist investors are looking at ways to turn Campbell around, but exactly how that might happen remains to be seen.

Kraft Heinz: Company slashes dividend and discloses SEC subpoena, leading stock to plunge 20 percent

CLOSE

Heinz, the popular ketchup brand, took to Twitter to announce the potential new product, ‘Mayochup.’
USA TODAY

Diplomat makes a costly delay

Finally, shares of Diplomat Pharmacy plunged 56.5 percent. The specialty pharmaceutical company said that it wouldn’t release its latest financial results as planned, instead announcing a delay until March 15. Diplomat explained the move in part, announcing that it would likely take a charge of about $630 million related to its pharmacy benefit management business. That division hasn’t done well since its acquisition in 2017, and Diplomat said that it would withdraw its 2019 guidance based on weak January performance and rising competition. None of that was good news for shareholders, and it’ll take considerable work for Diplomat to regain investors’ confidence.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Stamps.com. The Motley Fool recommends Diplomat Pharmacy. The Motley Fool has a disclosure policy.

The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.

Offer from The Motley Fool: The 10 best stocks to buy now
Motley Fool co-founders Tom and David Gardner have spent more than a decade beating the market. In fact, the newsletter they run, Motley Fool Stock Advisor, has quadrupled the S&P 500! Tom and David just revealed their ten top stock picks for investors to buy right now. Click here to get access to the full list.

Read or Share this story: https://www.usatoday.com/story/money/2019/02/22/why-stampscom-campbell-soup-and-diplomat-pharmacy-slumped-friday/39100085/


Source link

Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close