New Lows For CVS, Hormel And Silvergate

While stocks gained ground this week and many seemed to be recovering from the late February sell-off, these 3 well-known names slumped to new 52-week lows. CVS Health (NYSE: CVS), Hormel FoodsHRL
(NYSE: HRL) and Silvergate Capital (NYSE: SI) continued downward with little sign of bottoming.

CVS Health in February reported decent 4th quarter revenues and earnings but that hasn’t stopped investors from selling the stock. The previous 12-months EPS came in at -47.30% and the non-growth rate over the past 5 years comes in at -8.90%. The price to free cash flow metric is a solid 10.09.

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It’s a huge NYSE-listed company with a market capitalization of $106 billion. CVS is actively traded with an average daily volume of 8.28 million shares.

The stock trades at 1.5 times book value with a price-earnings ratio of 26. The p/e of the Standard & Poor’s 500 sits at 21, so with the multiple for CVS Health exceeding that level, it could still be considered overvalued even after all of the recent heavy selling.

Early in January, Evercore ISI downgraded its rating of CVS from “outperform” to “inline” and reduced its price target from $120 to $100.

The big healthcare plan company is paying a dividend of 2.96%.

Here’s the daily price chart of CVS Health:

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The stock now trades below the early February low and the early October, 2022 low and remains below both the 50-day moving average (the blue line) and the 200-day moving average.

Hormel Foods is moving in the opposite direction of other stocks that fall in the “food products” sector. The company just reported a drop in 1st quarter sales — and earnings per share for the period came in at $.40, less than analysts’ estimates of $.45. Disappointed shareholders took the opportunity to unload.

Earnings per share for the previous 12 months were up by 9.60% and for the past 5 years by 3.00%. Shareholder equity exceeds the amount of long-term debt on the company’s books and the current ratio is 2.50. Hormel’s market capitalization sits at $22.28 billion.

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On Friday, JP Morgan downgraded its opinion of the company from “neutral” to “underweight” with a price target reduction of from $47 to $38.

Hormel pays a 2.71% dividend.

The daily price chart for Hormel Foods looks like this:

That looks like 9 straight days of selling with the new 52-week low as the sad-looking outcome. The 50-day moving average is down trending and so is the 200-day moving average, an unfortunate combination for those who may have purchased the stock in mid-August, 2022.

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Silvergate Capital tanked this week after suspending its crypto payments network with so-called stable coins beginning to destabilize. On March 2nd, Forbes removed the company from its “Crypto Asset Stock Portfolio.” Shareholders agreed and removed the stock from many portfolios.

Here’s the daily price chart for Silvergate Capital:

The move off of the August high at $105 to Friday’s close of $5.77 is a 94% drop in value from peak to trough.

Take a look at the weekly price chart for Silvergate Capital:

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The price hit $240 in November, 2021. The loss in value for those who excitedly bought back then is now 97.5%.

Not investment advice. For educational purposes only.