What’s The Deal With These Stocks Getting Pounded Today?

Amid a strong day for the market which has seen several major companies post earnings beats and shares of Ferrari NV (NYSE:RACE) race out of the IPO starting gates, a handful of other companies are heading the wrong way on the valuation track. Let’s find out what has soured investors on Pearson PLC (ADR) (NYSE:PSO), Polaris Industries Inc. (NYSE:PII), St. Jude Medical Inc. (NYSE:STJ), EXCO Resources Inc (NYSE:XCO), and Weight Watchers International, Inc. (NYSE:WTW) today and whether they could make for good investments on the dip.

Let’s start with Weight Watchers International, Inc. (NYSE:WTW). After two days of torrid gains that left one editor of Insider Monkey shaking his head at the powerful Oprah effect on the stock, Weight Watchers International, Inc. (NYSE:WTW) is experiencing a somewhat expected pullback today. Shares have dipped by just over 6.50% in early afternoon trading after gaining 169% over the previous two trading sessions after it was revealed that the renowned celebrity had taken a 10% stake in the weight management company, landed a seat on its board, and entered into an agreement to promote its services. That run increased the value of her initial investment of $43.2 million to over $116 million. In addition, Oprah has the option to purchase another 3.5 million shares at $6.79 each, an option which would be worth another $36 million at present. The run for the stock has crushed short sellers, who were shorting over 50% of the stock’s float amid the company’s difficulty competing in the new era of fitness trackers. Investors we track were fleeing the stock in the second quarter, with ownership falling to 9 from 18. Shares are still down by over 32% year-to-date.

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Shares of Pearson PLC (ADR) (NYSE:PSO) are off by over 16% today after the education media company lowered its guidance for fiscal year 2015. The provider of textbooks and other educational material has been negatively impacted by declining community college enrolment in the U.S, and weakening sales in South Africa. That led Pearson PLC (ADR) (NYSE:PSO) to lower its full year earnings guidance to a range of 70p-to-75p ($1.08-to-$1.16), down from a range of 75p-to-80p ($1.16-to-$1.24) previously forecast. Pearson PLC was not overly popular among the elite investors we track, who held just 0.30% of its shares, though their collective sentiment did improve slightly during the second quarter, to nine funds with holdings compared to five.

We analyze three more stocks getting roughed up by traders today on the following page.

Polaris Industries Inc. (NYSE:PII) is down by more than 11% today, hitting a 52-week low in the process after it reported its third quarter earnings this morning. A manufacturer of ATV’s, snowmobiles, and motorcycles, Polaris Industries’ results appear to be strong on the surface, as its revenue of $1.46 billion and earnings of $2.30 per share each narrowly beat expectations, while the Minnesota-based company also narrowed its full year guidance towards the upper end of the previous guidance range. Nonetheless, the market has been taken aback by some aspect of the report, be it the declining snowmobile sales, down by 52%, or the modest international growth of just 1%. Billionaire Ken Griffin held a 1.99 million-share stake in Polaris Industries Inc. (NYSE:PII) as of June 30, up by 489% during the second quarter.

St. Jude Medical Inc. (NYSE:STJ) has fallen by 8.85% today after releasing its third quarter results and updating its fiscal year 2015 guidance. The earnings guidance update of $3.93-to-$3.95 per share for the year came in below the consensus estimate of $3.98, while its revenue of $1.34 billion came in slightly beneath estimates of $1.35 billion. That revenue figure represented a year-over-year decline of 2.4%. Shares have gradually weakened since late-August, when they temporarily spiked due to a mistaken report that Abbott Laboratories (NYSE:ABT) was preparing a $25 billion takeover offer for St. Jude Medical, which it quickly denied. Surprisingly, it actually took several days for shares to correct from the erroneous report. St. Jude Medical Inc. (NYSE:STJ), a medical device maker, was found in the portfolios of 41 investors that we monitor, who held 3.80% of its outstanding shares.

Lastly is EXCO Resources Inc (NYSE:XCO), which like Weight Watchers, has experienced a small correction today, declining by a little over 4% after gaining more than 23% yesterday. Yesterday’s surge came after the oil and natural gas company announced a series of moves intended to reduce its debt and improve its liquidity. Among the deals was an agreement with subsidiaries of Prem Watsa’s Fairfax Financial Holdings to provide a $300 million Senior Secured Second Lien Term Loan to EXCO. EXCO also issued $591 million of 12.5% Senior Secured Second Lien Term Loans and repurchased $577 million of Unsecured Notes for $291 million, reducing its net debt by approximately 18%. Watsa’s Canadian holding company is one of the largest investors in EXCO Resources Inc (NYSE:XCO) among the firms we follow, holding 17.54 million shares on June 30.

Disclosure: None