Spurred by strong retail sales for November, investors were willing to go bargain-shopping for stocks that had been put on sale during Wednesday’s carnage. The Department of Commerce reported retail spending (not counting automobiles) was up a healthy 0.5% last month, prompting a 0.5% pop from the market.
It wasn’t all grins and giggles from shareholders of GoPro Inc. (GPRO), Mobile TeleSystems OJSC (MBT), and Teck Resources Ltd (TCK), though. These three names continued to struggle in Thursday, doling out more losses to shareholders who’ve decided to stick with them.
GoPro (GPRO)
The once-market-darling GoPro has been anything but well-loved since late November, with that bearishness hitting a critical mass this week. Today’s 4.3% pullback from GPRO stock brings the loss since the first day back from Thanksgiving to a whopping 24%.
The most common explanation for the demise of GoPro of late has been concerns about the upcoming end of a lockup period, on December 23. With a big batch of GPRO stock poised to flood the market two weeks from now (and likely with a profit-taking disposition) traders are choosing to get out now rather than wait to push through what’s expected to be bearish pressure then.
The forward-looking P/E of 48.5 isn’t exactly helping GoPro either.
Mobile TeleSystems (MBT)
Russian telecom company Mobile TeleSystems found few friends on Thursday, with MBT stock finally settling to a close of $8.92, down more than 6% from Wednesday’s close.
The selling was sparked by a downgrade from Barclays, which reported a lowered opinion on all Russian telecom stocks Wednesday afternoon. Mobile TeleSystems along with a couple of its peers are now deemed “equal weight” picks, as opposed to their previous rating of “overweight.”
The core of the reason for lowered price targets and earnings projections for each downgraded Russian telecom name is expected ongoing weakness in the ruble through 2015. Barclays sees an exchange rate of something near 60 rubles per U.S. dollar in the coming year.
Teck Resources (TCK)
Teck Resources wasn’t a victim of any specific news on Thursday; the market just didn’t like it. TCK stock has been falling ever since a slew of analysts hit it with “hold” ratings. TCK was down more than 6%, leading the losses taken by most of its resource peers, and taking a cue from today’s more modest weakness from commodities like gold and oil.
Teck Resources may well be one of the most diversified mining companies on the planet, with a hand in industrial metals like copper and zinc, coking coal, and even an oil sands project. Teck Resources is also unique in the fact that it’s reliably profitable, allowing TCK stock to boast an equally reliable current dividend yield of 5.7%. With most commodities alarmingly weak, though, investors may be expecting the company’s reliable margins and dividend payout to wither soon.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
