This Week's Early Losers - Part 1

by: Bill Maurer

It hasn't been a great start to the week for the markets. On Monday, renewed fears over problems in Europe sent markets sharply lower throughout the day, with a late day rally paring only some of the losses. On Tuesday, early morning gains were wiped out by a lower than expected retail sales report. Tuesday afternoon, markets continued to fall as the Euro dropped and the Federal Reserve's statement was "a yawn". In two days, the Dow is down 1.88%, the NASDAQ is down 2.55%, and the S&P 500 is down 2.35%. There are a number of storied stocks that have made headlines as well, falling more than the markets. Here are seven of this week's early losers.

Green Mountain Coffee Roasters (NASDAQ:GMCR): Green Mountain shares have fallen 14.5% over the two day period. The major drop was on Tuesday, as reports of poor November K-cup sales sent shares down 12%. According to the report, the company's K-cup market share percentage fell by 0.3% over a four week period in November, and prices for those units were down about 1%. Green Mountain shares have lost all of their gains over the past two weeks. Before yesterday's decline, shares had almost recovered all of their post-earnings losses, but now they are back below $50. If this report is true, you can expect Green Mountain to post another revenue miss when it reports this quarter's earnings, which will continue to fuel the bear camp and their concerns over the company's growth.

Walter Energy (NYSE:WLT): Shares of the metallurgical coal producer are down about 9.15% over the two day period. While there hasn't been any specific news in the past couple of days, Walter and the rest of the coal industry have extended last week's decline after a sector downgrade from Goldman Sachs. Walter has been rumored to be a takeover target multiple times in the past few months, but none of the speculation has turned out to be true as of yet. The company relies on a strong steel industry, and with concerns over the economy, it will struggle. The company has missed earnings per share numbers in three of the past four quarters, and analysts have taken down 2011 and 2012 numbers by nearly 30% over the past three months. (NYSE:CRM): Shares of the customer relationship management and cloud computing firm are down more than 8.5% so far this week. The culprit was a downgrade from Cowen on Monday from Neutral to Underperform, citing billings and competition concerns. The analyst believes that productivity will be down going forward, with the company having to choose between growth and profits. The company had recovered about two-thirds of its post-earnings losses before the drop, but shares continued to decline with the market on Tuesday, despite positive coverage out of Citi and Merrill Lynch. Salesforce is a great company to debate, because its extremely low GAAP earnings leave its P/E ratio in the thousands. Yes, I said thousands.

Morgan Stanley (NYSE:MS): I've got to mention one of the financials as they have been big losers. Morgan Stanley has done the worst of the big banks, down 7.4% so far this week. Morgan Stanley shares were up early on Tuesday after news of a mortgage security settlement, which will result in a $1.8 billion loss. However, the Euro faded throughout the day and the Fed statement sent markets lower, with financials leading the way down. It will be interesting to see how the loss will affect earnings estimates, as they've already been cut in half for the company's current quarter over the past 90 days.

SPDR Gold Shares (NYSEARCA:GLD): Shares of the gold ETF have declined nearly 4.8% this week as gold has taken a tumble. Gold has been hit as the dollar has rallied strongly the past two days, and the metal extended its decline after the Fed Statement. Also, news that commodity guru Dennis Gartman has fully closed his gold position has sent many running for the exits. Gartman stated Monday that Gold could hit $1,450 before it breaches $1,800 again. As long as the dollar remains strong, gold will continue to feel some pressure, and I think we could see continued short term weakness if traders are forced into margin calls.

Diamond Foods (NASDAQ:DMND): Shares of the snack maker have continued to be one of the market's most volatile stocks. After a 52% plus gain on Friday after positive analyst coverage, shares plummeted Monday after the company announced it will delay filing of its first quarter results due to accounting concerns. Shares fell Monday and continued their decline on Tuesday, down nearly 27% over the two day period. The company's accounting has been under scrutiny for some time now, and Monday's news only continues the argument to stay away. Given the large moves recently, you do not want to be caught on the wrong side of this volatile trade.

Intel (NASDAQ:INTC): Shares of the chip maker have fallen 5.8% so far this week after the company cut its revenue forecast on Monday. The company blamed the recent flooding problems in Asia, causing hard drive shortages. Revenue numbers for this quarter were taken down heavily, and I would think next quarter could be hit as well, as the company said that problems would linger into the first half of 2012. I recently wrote that this drop presents a buying opportunity for Intel. Shares might continue to be under pressure in the short term, but this is a good long term play and the company is the leader in its industry.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in CRM, WLT over the next 72 hours.