Monday saw another explosive move for the stock market -- but this time into positive territory. Some major benchmarks were up almost 2% as investors continued to bet on the sustained momentum of the 9-year-old bull market. Yet even though market participants have generally been upbeat about the prospects for the economy at large, they've still identified some pockets of concern that hurt certain individual stocks. Lumber Liquidators Holdings (NYSE: LL), Stamps.com (NASDAQ: STMP), and La Jolla Pharmaceutical (NASDAQ: LJPC) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.
Lumber Liquidators gets sawed down to size
Shares of Lumber Liquidators Holdings dropped 9% after the flooring specialist got a downgrade from analysts at Wedbush. The analyst company lowered its rating on Lumber Liquidators from outperform to neutral, cutting its price target on the stock from $39 per share to $28. Wedbush is concerned that the flooring retailer has already gotten all of the growth momentum from paying greater attention to selling to professional contractors and performing installations over the past year, and future growth could be harder to come by. Meanwhile, if the home improvement specialist has to cut prices in order to compete with industry rivals, then Lumber Liquidators could see even greater disruptions in the near future.
Image source: Lumber Liquidators.
Stamps.com falls despite takeover speculation
Stamps.com stock was down 5% even though some of those following the online postage specialist believe that it could be a takeover target. Analyst company B Riley reiterated its buy rating and price target of $250 per share on Stamps.com, asserting that the postage company could either team up with established carriers or get bought out by e-commerce giants. Yet the fear is that e-commerce specialists will simply reinvent shipping on their own, bypassing traditional carriers and the companies like Stamps.com that provide related services. It's too early to be sure, but for now, shareholders are nervous about Stamps.com's ability to hold its own in a more competitive environment.
La Jolla completes the trilogy
Finally, shares of La Jolla Pharmaceutical dropped 13%. The pharma company got a downgrade from analysts at Jefferies, who cut their rating from buy to underperform and reducing their price target from $40 per share to $29. According to Jefferies, La Jolla could have trouble with its blood-pressure medication Giapreza, especially if the number of patients starting to use the drug proves to be less than the company had initially hoped. Investors were pleased late last year when the FDA approved Giapreza somewhat early, but they'll have to wait until later this spring to see whether analysts' fears are justified.
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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 Lumber Liquidators. The Motley Fool has a disclosure policy.