Investing

4 Companies That Destroyed Shareholders This Past Week

This past week was a rough one for the broad markets, both the Dow Jones Industrial Average and S&P 500 had less than spectacular weeks. Much of this can be attributed to the strengthening dollar, dropping oil prices and the Federal Reserve rate hike — although there was a brief rally Wednesday. As a result, many shareholders have taken punishment in some form, but some have been absolutely obliterated.

24/7 Wall St. has tracked four companies in which shareholders were destroyed last week. Many of these companies have seen their markets caps drop sharply.

KaloBios Pharmaceuticals

KaloBios Pharmaceuticals Inc. (NASDAQ: KBIO) dropped on perhaps the biggest news story of the week, the arrest of Martin Shkreli. This hedge fund manager and CEO of both Turing Pharmaceuticals and KaloBios has faced incredible social outrage since earlier this fall when he jacked up the price of an AIDS drug by over 5,000%. However, his arrest had nothing to do with that. Shkreli was under investigation by the FBI and U.S. Securities and Exchange Commission (SEC) for securities fraud.

It never looks good when your CEO is arrested and under investigation for these things. Turing already had replaced him with Chairman Ron Tilles.

Shares of KaloBios were trading at $23.59 on Friday’s close, with a consensus analyst price target of just $5.00 and a 52-week trading range of $0.44 to $45.82. Over the course of the week, shares dropped about 15%.


3M

Last week, 3M Co. (NYSE: MMM) announced guidance for the 2016 full year and an update for 2015. Reflecting the realities of a continued slow-growth global economy, the company expects 2015 full-year organic growth of approximately 1.0%, versus prior guidance of 1.5% to 2.0%. Earnings per share (EPS) are anticipated to be approximately $7.55, against a prior range of $7.60 to $7.65. The Thomson Reuters consensus estimates call for $7.63 in EPS on $30.38 billion in revenue.

As for 2016, EPS is expected to be in the range of $8.10 to $8.45, an increase of 7% to 12%, compared to the consensus estimate of $8.40. Organic local-currency sales growth is expected in the range of 1% to 3%, and the free cash flow conversion rate of 95% to 105%. However this may not have been what investors were looking for.

Shares of 3M closed trading at $146.92 on Friday, with a consensus price target of $159.36 and a 52-week trading range of $134.00 to $170.50. Shares dropped about 6.5% from the high on Monday.