The markets got hammered Friday, with the S&P 500 posting a loss of 2.67%. Fear of the European financial crisis continues to affect our markets as investors worry that Europe's debt will hurt the U.S. economy. The president's speech was encouraging, but reminded us of the many problems America still faces. Bonds and commodities fell throughout the day, along with the majority of stocks. Below is a look at 4 stocks that posted large losses today, but which I believe now present great opportunities.
Verisign, Inc (NASDAQ:VRSN) posted a loss of nearly 15% after CFO Brian Robbins announced he was stepping down. There have been an array of rumors surrounding this company of late, including everything from scandals to takeovers. Investors believe this news to be negative, judging from this stock's reaction, but I believe this offers investors the opportunity to buy a good company that has fundamentally improved over the last few years.
Robbins is leaving on good terms with the intention of staying through the end of September. I believe he got a better opportunity at another company, maybe a CEO position. I do not believe this move insinuates that a lawsuit or future sanctions are coming, nor do I believe this kills the chance of a takeover. (In fact, maybe there is a takeover in play, and Robbins didn't want to be demoted or work with another CFO.) It's speculative, but the stock lost on Friday because of speculation, and I believe Robbins leaving the company has little to no greater meaning.
The Kroger Company (NYSE:KR) posted a loss of nearly 6% after reporting very solid earnings. The company announced revenue of more than $20 billion and income that increased 7.3% year-over-year. Some suggest lower profit margins, high unemployment, and market volatility caused the stock to decline. I believe that if investors are trading on that sentiment, they will be deeply regretful within the next 2 years. Kroger is showing no signs of slowing down; in fact, it continues to grow in a bad economy because of its low prices.
The company offers many customer incentives. Every time I go to Kroger, I save around $60 on my purchases with my savings card, which reminds me of why I use Kroger over competitors such as Wal-Mart. I may not be paying much less for the product, but its marketing keeps me coming back. Also, the company is constantly adding to its generic program. I expect Kroger to continue growing as it adds more superstores to reinvent itself as more than a grocery store.
Corning Incorporated (NYSE:GLW) lost 5.43% of its value throughout the trading day on Friday. The loss came after the company announced that the retail demand for televisions would be down for the second half of the year. This means the company expects the sales volume of liquid-crystal-display glass to be lower than originally expected because of weak consumer demand. Though the company officially announced this news today, I thought it was already a known fact and incorporated into the stock price. The stock is only trading with a price-to-earnings of 6.47 after the second quarter disappointed investors with slumping display sales.
However, I am especially bullish on this company because of its emerging markets exposure, and although the display segment is critical, the emerging markets are growing at a rapid rate. During the second quarter the company announced that its telecom segment increased 24%, its environmental segment increased 40%, and its specialty materials segment doubled in sales year-over-year. These emerging segments of business reflected the company's 17% increase in revenue year-over-year, despite a slumping display segment. I anticipate the company to continue growing these segments as it prepares for its future. The negativity surrounding this company, its low P/E, its growing markets, and its expectations to exceed $10 billion in annual sales by 2014 are exactly why I believe this company is a great stock to own over the next few years.
F5 Networks (NASDAQ:FFIV) posted a loss of nearly 5% on Friday in the absence of any significant news or key developments. The stock has traded with the market throughout the last month, but in the process has found a consistent trading range. The stock has lost more than 40% of its value since January, after posting explosive gains during 2010 on record earnings. The company is now on pace to significantly outperform 2010 earnings with higher revenue, income, assets and no debt to negatively impact its future. I believe the stock is worth considering at its current price, which is near 52-week lows, since a stronger balance sheet and better earnings are a consistent aspect of this company's performance.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in KR or GLW over the next 72 hours.