Between mixed earnings results, stability in Greece, and gold’s sharp plunge, investors weren’t quite sure what to make of Monday. They started out bearish, then stocks swung pretty deep into the black, but by the time all was said and done, the S&P 500 had whittled its gain down to a mere 0.08%.
The index closed at 2,128.28.
Modest movement would have been a relative victory for the likes of Barrick Gold Corporation (NYSE:ABX), Hertz Global Holdings Inc. (NYSE:HTZ) and Micron Technology, Inc. (NASDAQ:MU), however. These three names were the worst of the worst, and finished Monday deep in the red.
Here’s a look at today’s worst stocks.
Barrick Gold (ABX)
Just for the record, Barrick Gold was hardly the only gold mining stock deep in the red on Monday. Newmont Mining Corp. (NEM) and Goldcorp Inc. (GG) both fell 12%. Barrick Gold was the worst of the worst though, with ABX tumbling a stunning 16% on Monday.
The prod for the groupwide pullback was yet-another stumble for gold prices … the eighth day in a row gold has lost ground. Today’s dip of 2.5%, however, was by far the biggest dip of those days.
Gold mining stocks are ultra-vulnerable to weak gold prices, as the profitability of mining it falls dollar for dollar (on a per ounce basis) when gold tumbles. In fact, gold stocks like ABX and GG become particularly vulnerable when gold prices slump to or below the $1200/ounce area, as that’s the fairly typical fixed per-ounce cost to dig the precious metal up.
Micron Technology (MU)
Any Micron Technology investors who were hoping that an acquisition of the company by China’s Tsingshua would make for a profitable exit from a disappointing trade on MU have to be less than thrilled by today’s headlines.
Such a deal was never a sure thing since the buzz of the buyout started to take shape last week. But, it’s all but certain that the deal isn’t going to happen now. How do we know? Because Reuters said the company said so.
Though the sources weren’t identified, the buzz on the street is that Micron Technology can’t even take the $23 billion offer seriously since the Committee on Foreign Investment in the United States (CFIUS) would almost certainly quell the deal before it even began due to national security concerns.
Hertz Global Holdings (HTZ)
Hertz Global shares may have jumped firmly on Friday after announcing it had finally cleaned up its erroneous accounting statements from years past and refilled them, but it didn’t take long for the market to remember HTZ is still a struggling company, even if its book are now accurate.
HTZ peeled back from a peak price of $20.50 on Friday to a close of $19.01, and that rout continued today with shares falling 5%.
Monday’s selling may have had at least something to do with a conflicted updated opinion on HTZ from Deutsche Bank. After having some time to look at the revised/restated numbers, Deutsche Bank lowered its earnings outlook for 2015 from 65 cents to 26 cents per share. And yet, the research house maintained its “buy” rating on HTZ, and upper its price target from $24 to $27.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
