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Why National Beverage, Tesaro, and Community Health Systems Slumped Today

Wall Street had a relatively good day on Thursday, and the Dow, S&P 500, and Nasdaq Composite all enjoyed gains of between 0.1% and 0.2% for the trading session. A lack of any new controversy out of Washington supported positive sentiment, and Janet Yellen wrapped up her testimony before Congress with further comments that investors took as encouraging for the future of central bank policy and its impact on the financial markets on the whole. Yet some stocks trended in the opposite direction, as negative news led to concerns about their future prospects. National Beverage (NASDAQ: FIZZ), Tesaro (NASDAQ: TSRO), and Community Health Systems (NYSE: CYH) 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.

National Beverage fizzles out

Shares of National Beverage dropped more than 8% even though the seller of LaCroix sparkling water and other beverages reported good performance in its fiscal fourth-quarter financial report. The company said that revenue for the 2017 fiscal year climbed 15% from year-ago levels, resulting in a 75% boost to net income and earnings per share for the year. The move away from traditional soda toward sparkling water has been a godsend for National Beverage, as it has benefited from greater sales and cost advantages since sparkling water naturally avoids most of the expense of syrup that goes into most soda products. The company also said that May and June have been record months to begin the new fiscal year, and it's making progress in promoting its well-known Shasta brand as a sparkling-water soft-drink alternative. After nearly doubling over the past year, however, National Beverage stock might simply have gotten ahead of itself, and that might be the motivation for today's declines.

Image source: National Beverage.

Tesaro can't make a sale

Tesaro stock fell 7% after questions were raised about the biotech company's ability to find a potential buyer. Reports suggested that in contrast to what some had said recently, prospective buyers weren't willing to pay as much as Tesaro had wanted for a full acquisition. That dampened hopes among investors that Tesaro might be the beneficiary of a bidding war following the approval of its ovarian cancer treatment Zejula earlier this year. In addition, stock analysts at Janney Capital repeated a neutral rating on the stock, noting that future sales of its approved treatments could come in weaker than many believe and that competition could strengthen. Today's drop takes Tesaro shares down by nearly a third from their highs early in 2017, even though the stock is still up over the past 12 months.

Community Health waits for Washington

Finally, shares of Community Health Systems finished down 5%. Healthcare investors are watching nervously to see what will happen on Capitol Hill as lawmakers try to parse out agreeable details on a health reform bill. Hospital operators like Community Health worry that if a new version of healthcare coverage leads to a greater number of uninsured patients, then hospitals might end up once again facing substantial losses from uncollectible medical bills for providing care to the uninsured. With lawmakers working to find a compromise version of the bill that can get through the Senate, the concern is that any solution won't address what's problematic for hospitals. That could hurt Community Health's profits if anticipated increases in the ranks of the uninsured become reality.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.