Geron Corporation (GERN), STEC, Inc. (STEC): Only One of These Stocks Won’t Be a Winner

Although analysts are often reluctant to issue sell ratings on stocks, though sometimes they do so with a flourish, it might be worthwhile to pay attention to what Stifel is saying here. It’s not some third-party research firm with no connection to the company, but rather was the house Geron Corporation (NASDAQ:GERN) brought in to sell its stem cell research last year, the surprise move that caught everyone unawares. It also rated the company as a buy last summer, based on driving its two cancer therapies to market .

Of course, the clinical trials didn’t pan out the way Geron Corporation (NASDAQ:GERN) anticipated, and while perhaps not failures, they’re hardly looking like blockbusters. So Stifel has some intimate background knowledge of how this company operates and what it might take to get to the finish line. So if even it’s saying investors ought to get out of Dodge quick, it’s probably worth listening to them.

Many times Fools are cautioned to ignore analyst rankings in the buy-hold-sell game, but sometimes it’s an analysis that should be heeded.

Thank you, sir; may I have another?
And where Ulta and Geron Corporation (NASDAQ:GERN) offered something of a mixed bag when it came to their earnings, solid-state-drive maker STEC struck out on all three counts: It missed on revenues, whiffed on earnings, and offered guidance that came in below expectations. One, two, three strikes — you’re out!

Revenues fell 40% to $35 million, well below projections of $38 million, while per-share losses widened even more than what Wall Street was anticipating to $0.35 and much worse than last year’s $0.02 per share loss. Nor did the future look any better. It expects first-quarter revenues to come in at a measly $21 million, causing losses to grow even more to a range of $0.40 to $0.42 per share. Analysts had been slightly more hopeful, predicting revenues of $38 million and losses of “just” $0.31 per share.

STEC, Inc. (NASDAQ:STEC) has been hit with the ugly stick pretty bad and its stock has lost nearly half its value over the past year. Activist investors are agitating for the entire board to be replaced, particularly the company founders. With little hope for regaining traction in the cards, it may be just what’s needed to resurrect this dying company.

The article Only One of These Stocks Won’t Be a Winner originally appeared on Fool.com and is written by Rich Duprey.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Ulta Salon, Cosmetics, & Fragrance.

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