Why iRobot, Golar LNG, and Merrimack Pharmaceuticals Slumped Today

By Dan Caplinger Markets Fool.com

The market has seen an unusual lack of volatility lately, and Wednesday continued the trend, with major benchmarks falling less than 0.15%. The Dow managed to hold onto the 21,000 mark as uncertainty about the future of the U.S. economy seemed to prevent the stock market from continuing its advance from earlier in the month. Yet even though the generally positive mood on Wall Street prevented larger losses for the broader market, some individual stocks weren't as lucky. iRobot (NASDAQ: IRBT), Golar LNG (NASDAQ: GLNG), and Merrimack Pharmaceuticals (NASDAQ: MACK) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.

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iRobot suffers a mild breakdown

Shares of iRobot dropped 7% after the maker of robotic household devices got a downgrade from an analyst company. Canaccord Genuity cut its rating on iRobot from buy to hold, and set a $90-per-share target price on the stock. The share price decline today sent iRobot most of the way to that price target, and the analyst expressed concerns that iRobot might not have any major new product in its lineup this year that could drive near-term growth prospects. In the longer run, Canaccord is more positive on iRobot's future, anticipating fairly substantial growth in 2018 and beyond. The decline today shows that many market participants focus almost exclusively on short-term factors, even when the story for long-term investors still looks attractive.

Image source: iRobot.

Golar looks less energetic

Golar LNG stock fell 8% in the wake of the company's first-quarter earnings release. The liquefied natural gas carrier specialist said in its interim financial report that revenue in the first calendar quarter of 2017 was up 9% compared to the fourth quarter of 2016, but higher expenses and a jump in depreciation and amortization costs led to a larger operating loss than in the previous quarter. Losses in its affiliates, including its Golar Power, OneLNG, and Golar Partners stakes, weighed on the company's overall results. Going forward, new liquefaction projects are ramping up production, increasing the level of general activity and boosting demand for shipping. Nevertheless, disappointing results are likely in the second quarter, and it could take some time for positive fundamentals in the industry to show up in Golar LNG's actual results in the future.

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Merrimack takes a dive

Finally, shares of Merrimack Pharmaceuticals plunged 23%. The biopharmaceutical company's drop stemmed from its decision to replace its CFO and head of corporate development effective in early June. Investors haven't been happy with Merrimack since it made a strategic decision to sell its Onivyde treatment for pancreatic cancer to a third party, leaving it with only a pipeline of prospective candidate drugs. Merrimack does have some potentially promising cancer-fighting drugs, but shareholders don't seem pleased with a key executive's departure at a critical time for the biotech company. Moreover, with the stock having just paid a one-time dividend of roughly a third of its value, some shareholders apparently saw now as a good time to let their shares go.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends iRobot. The Motley Fool has a disclosure policy.