We looked at some of the biggest movers last week, while only considering the companies with a market cap of at least $5 billion.
DexCom Inc & Insulet Corp
Manufacturers of glucose monitoring systems, DexCom (DXCM:US) and Insulet Corp (PODD:US) saw their stocks rally after Abbott Laboratories (ABT:US) reported results that alleviated concerns about the impact of weigh-loss drug Ozempic on the demand for their diabetes-focused products.
The introduction of a new class of weight-loss drugs has had a notable impact on global equity markets. This development has caused the shares of various industries, including food and beverage companies and medical device makers, to experience a downturn. As earnings season progresses, companies are expected to disclose whether consumer behaviors are changing due to the influence of drugs like Ozempic, which is produced by Novo Nordisk (NVO:US).
Healthcare companies will have to reassure investors that Ozempic's impact on profit expectations will be minimal. Abbott Laboratories's quarterly results, which demonstrated growth in its medical devices related to heart disease and diabetes, provided some relief and dispelled concerns that GLP-1s might negatively affect the business.
Still, Congress members were mostly selling DXCM and PODD shares in recent months. Representatives Josh Gottheimer, Ro Khanna, and Daniel Golman were all trading shares of these two companies in recent months.
The streaming media company Netflix’s (NFLX:US) stock added almost 13% last week after surging as much as 18% on Thursday in its most substantial intraday percentage gain since January 2021. The rally took place after a strong quarterly report showing robust subscriber gains.
Moreover, Netflix is increasing prices for certain customers in the US, UK, and France. This price increase comes after the company posted its best quarter for subscriber growth in years, demonstrating management's confidence in the future, which stands out amidst the challenges faced by the media industry. As a result, the company's shares gained despite other major tech stocks falling last week amid rising tensions in the Middle East.
The surge in NFLX stock comes after Rep. Michael McCaul was actively selling shares in the summer. He disclosed three transactions – all valued between $100,000 and $250,000 – to capitalize on the strong YTD performance.
Enphase Energy Inc
Headquartered in Fremont, California, Enphase Energy (ENPH:US) saw its stock fall 20% in response to the soft preliminary results of rival SolarEdge (SEDG:US). Investors are now pricing in that Enphase will also pre-report weak results, hence, they are adjusting expectations and preparing for worse-than-expected figures.
Both Enphase and SolarEdge hit 52-week lows last week after the latter following the release of preliminary third-quarter sales figures from equipment-maker SolarEdge. The sales for this period significantly missed the average analyst estimate, causing SolarEdge's stock to crash.
SolarEdge CEO said in the statement the company experienced “substantial unexpected cancellations and pushouts of existing backlog” from European distributors in the second part of the third quarter.
Rep. McCaul was aggressively selling shares of SolarEdge in recent months.
Elsewhere, multinational automotive giant Tesla’s (TSLA:US) shares recorded the worst weekly performance in 2023 after the electric vehicle (EV) maker missed analyst expectations for the third quarter. Moreover, CEO Musk’s cautious comments on the earnings call sent a strong warning to the entire EV market about the demand for this type of vehicle in an environment of high-interest rates.
The disappointing third-quarter results from Tesla serve as a cautionary signal for the broader EV industry, according to Morgan Stanley (MS:US) analyst Adam Jonas. He emphasized that when the leading EV company, with a significant share of the global and U.S. EV markets, provides a negative outlook, it should be a wake-up call for competitors and suppliers.
Jonas believes that Tesla's more cautious outlook is a protective measure given the current elevated macroeconomic, consumer, and geopolitical risks.
“While the reset may hurt shares near term, we believe this may prove to be the right strategy for the company and its stakeholders over the long term,” Jonas said in a client note.
Hence, Tesla investors were offloading shares as the stock’s valuation (P/E of over 60) looks unsustainable as the EV maker continues to lower demand (which is hurting margins) to spur demand.
In recent months, Congress and Senate members were mostly buying Tesla shares, which are up more than 70% year-to-date.