Wedbush downgraded Callaway Golf Co (NYSE:ELY) — from “outperform” to “neutral” — this week.
It’s easy to see why the market has soured on Callaway Golf Co (NYSE:ELY). Analysts see another loss this year on a slight decline in revenue. This is a stark contrast to other luxury goods retailers that are thriving these days. If high-end handbags and jewelry items are thriving, and this premium club maker is getting clubbed, it has to be a problem with the company itself.
4. Fizzy lifting drinks are great until you see the blades
Shares of Sodastream International Ltd (NASDAQ:SODA) opened sharply higher on Thursday after sources told Israel’s Calcalist that PepsiCo, Inc. (NYSE:PEP) had submitted a $2-billion buyout offer.
Now, the Hebrew daily business publication is certainly credible. This was the same source that broke the news last month about Israel’s Waze being in play. That continues to be the case today. However, this story didn’t make sense. Sodastream International Ltd (NASDAQ:SODA) may be a great acquisition target, but it’s not going to come from a company that has far more to lose than gain in a buyout.
PepsiCo, Inc. (NYSE:PEP) would be validating SodaStream’s model with this purchase at the expense of its far more lucrative canned and bottled carbonated soda business. PepsiCo would be ruffling the feathers of its bottlers, and betraying its recent history of buying companies that move it away from sugary soft drinks.
SodaStream’s heavy short interest makes it an easy candidate for a short squeeze, but we deserve more feasible buyout rumors moving stocks higher.
5. There’s no such thing as a Quiksilver, Inc. (NYSE:ZQK) lining
It’s not a surprise when retailers that are out of favor do poorly, but it is a shock when the good ones prove mortal.
Analysts had high hopes for Quiksilver, Inc. (NYSE:ZQK) heading into Thursday afternoon’s quarterly report. They saw the retailer of extreme sports apparel posting a small profit on a modest uptick in sales.
Well, it missed on both fronts. Quiksilver, Inc. (NYSE:ZQK) actually posted a widening deficit on a startling 7% drop in revenue. It’s updating its guidance accordingly. Even though Quiksilver’s weakness stemmed from its international operations — stateside growth was positive — it’s still not pretty when the good ones let you down.
The article This Week’s 5 Dumbest Stock Moves originally appeared on Fool.com.
Longtime Fool contributor Rick Munarriz owns shares of SodaStream. The Motley Fool recommends Apple, PepsiCo, and SodaStream. The Motley Fool owns shares of Apple, PepsiCo, and SodaStream.
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