Each week Forcerank runs a variety of games covering different industries. What we have found, is that the lowest ranked companies in their respective games deliver the biggest negative price movement and vice versa for those in the top position. This week we look at a list of companies that are consistently at the bottom or trending lower in their respective games. They include GoPro, Salesforce, Adobe, Gilead Sciences and VMware.
GoPro (NASDAQ:GPRO) | Hardware: GoPro is hurting since releasing its abysmal third-quarter results that missed by 26 cents on the bottom line and $60 million on the top. More importantly though, the action camera company cut guidance heading into the pivotal weeks of the holiday season. Shares dropped over 25% in the moments following the print and have yet to reconcile their losses. Since then, GoPro has seen a technical breakdown with on balance volume and MACD turning negative along with a bearish crossover of its 200 day moving average. GoPro’s newest products the Hero 5 and Karma drone are clearly not expected to meet the company’s initial goals when it debuted at the beginning of September. A series of downgrades along with deteriorating fundamentals and technicals support a continued channel down.
Salesforce.com (NYSE:CRM) | Large Enterprise Software: Salesforce had been riding a wave of positive momentum after it abandoned its bid for the beleaguered Twitter (NYSE:TWTR). Since then, Forcerank users pushed it up in the enterprise software game, but with its scheduled quarterly report this week, the consensus has turned sour on Salesforce. Salesforce has seen pressure in recent quarters from increasing competition and consolidation in the cloud-computing market. Microsoft's (NASDAQ:MSFT) acquisition of LinkedIn (NYSE:LNKD) this year has put Salesforce on the spot to make a move that will reinforce its position in the CRM market. These events along with decelerating growth have contributed to sluggish stock movement this year. A breakdown in its chart suggest the worst has yet to come. In early October the 200-day moving average breached the 50-day in a bearish manner and more recently we have seen a bearish crossover in the MACD and steadily worsening volume growth. The combination of these factors led Forcerank users to drop their rankings from a 3 to 4.83 this week.
Adobe Systems (NASDAQ:ADBE) | Large Enterprise Software: Adobe, like the other names on this list, is facing a technical breakdown after a strong first half of the year. Just last week the stock closed a massive gap down that formed following its better-than-expected third-quarter results. Over this time, share prices have dipped below their 20- and 50-day moving averages as it looks to close additional gaps at $100, about $3.50 below its current trading price. The trend down has been supported by declining MACD and on-balance volume. Forcerank users hammered Adobe this week, dropping it to the #5 spot in the enterprise software contest just ahead of Citrix Systems (NASDAQ:CTXS) and Intuit (NASDAQ:INTU).
Gilead Sciences (NASDAQ:GILD) | Biotech: Fundamental growth has stagnated in recent quarters on the back of a slowdown in its key Hepatitis C franchise. The treatments have hit a roadblock following the release of Merck's (NYSE:MRK) cheaper Hep C drug and greater adoption of generic drugs. Analysts at Stifel and Mizuho still remain optimistic about the biotech’s outlook and have initiated coverage with a buy rating. Forcerank users, on the other hand, are losing their cool with Gilead. Average user ranks have dropped from 4.9 at the end of October to about 5.5 this week. This pessimism is supported by weak technicals as the stock trades in the upper Bollinger® limit, indicating it is overbought.
VMware (NYSE:VMW) | Most Heavily Shorted: VMware, like Adobe (NASDAQ:ADBE), is coming down from its high created by robust third-quarter results. Shortly after the report, the stock received a number of upgrades that pumped prices significantly higher. Conventional wisdom would suggest a gap down is on deck before shares can breakout again. This means shares would need to drop down about $3.50 to $73.50 before pushing higher. Meanwhile, its 4-month volume profile is most consistent with a $73 share price, which would fill the open gap. A bearish crossover in the MACD last week along with a plunging Forcerank ranking reinforce a downturn on the horizon.