The European Central Bank served up more details of its stimulus plan on Thursday, and even perennial pessimist Nouriel Roubini confessed he thought the asset bubble currently being inflated — and taking stocks with it — likely wouldn’t pop until sometime in 2016.
Neither the ECB nor Roubini was enough to pull the market up and out of its doldrums today, though. In fact, Wynn Resorts, Limited (WYNN), EP Energy Corp. (EPE), and Thor Industries, Inc. (THO) were especially weak on Thursday, underscoring the market’s growing malaise.
Wynn Resorts (WYNN)
Wynn Resorts shares plunged to new lows for the year on Thursday in the wake of worries about weakness in Macau’s gambling revenue and Wynn Resorts heavy capital expenditures.
Earlier in the week, Investors Business Daily reported that gaming revenue in Macau had fallen 20% on a year-over-year basis, extending a soft patch that materialized in the middle of the year. Many analysts don’t expect December to stop the slide either.
Exacerbating the woes for owners of WYNN stock and its peers was an analysis from investing research website Market Realist pointing out that growth in capital expenditures from Wynn Resorts exceeded such spending growth from any other hotel and leisure name.
WYNN stock fell nearly 4% for the day, and has fallen nearly 9% this week.
Thor Industries (THO)
Thanks to today’s 6% tumble, THO stock is now off 7% for the week so far.
The ball started rolling in a bearish direction on Monday, when Thor Industries posted its results for fiscal Q1 of 2015. The maker of RVs and camping trailers turned a profit of 73 cents per share of THO stock on revenue of $922 million. The market, however, was expecting a profit of 81 cents per share.
BMO Capital Markets poured fuel on the fire today, downgrading Thor Industries from “outperform” to “market perform.” BMO lowered its price target on THO stock from $62 to $54, explaining:
“While demand trends still appear quite strong, we are downgrading the shares because we are concerned that the company will continue to see gross margin pressure for the foreseeable future, mainly from rising labor costs. Unlike potential pressure from changes in materials costs, currencies, or discounting, which may come and go, we think the labor issue is more a structural one that does not look like it will alleviate anytime soon.”
EP Energy (EPE)
The rout of energy stock continues, with independent explorer EP Energy leading the charge lower on Thursday. EPE stock was down 12% on the heels of crude oil’s 50-cent slide to $66.86 per barrel.
The pullback in oil prices has hurt most energy stocks, but U.S. shale stocks like EP Energy have born the brunt of the sector’s stumble. The cost of shale oil production can be quite high for some, making them sensitive to significant drops in crude oil prices. EPE stock was simply Thursday’s biggest target.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
