It could have been worse on Thursday, ut not leaps and bounds worse. With nothing to inspire any real buying, Wednesday’s rebound effort fizzled and the bears went back to work with their rollover effort. Today’s close of 2041.91 for the S&P 500 was not only down 1.2%, but left the index at its lowest close in a week and a half.
Leading the bearish charge on Thursday were CarMax, Inc (NYSE:KMX), Charles Schwab Corp (NYSE:SCHW) and Citigroup Inc (NYSE:C).
Here’s what up-ended each.
CarMax, Inc (KMX)
CarMax was the worst of the worst among large caps on Thursday, giving up more than 7% following last quarter’s earnings report and outlook.
The auto-dealer’s fiscal Q4 numbers were fine. The company earned 74 cents per share on sales of $3.71 billion, up 14% and 5.5%, respectively, from the year-ago numbers. Those results also topped expectations for a bottom line of 71 cents per share of KMX and revenue of $3.68 billion.
The meltdown, however, was spurred by the negative reaction to part of CEO Tom Folliard’s comments on the number. He stated:
“While we faced a somewhat more challenging sales environment in the second half of the year, we delivered solid revenue and EPS growth in both the fourth quarter and the fiscal year, we opened a record number of stores and we made progress toward optimizing our capital structure.”
The market just wanted bigger and better numbers along with a heavy dose of corporate cheerleading.
Charles Schwab Corp (SCHW)
Online brokerage firm Charles Schwab may have ranked highest in J.D. Powers’ investor satisfaction survey this year, but that wasn’t enough to prevent Jefferies from lowering its target price on SCHW.
Though Jefferies maintains its “Buy” rating on SCHW, it did knock its target down from $34 to $33 per share, which is in step with dialed-back earnings expectations for the current year. Now Jefferies is calling for income of $1.24 per share this year, down from a previous estimate of $1.27 per share of SCHW.
Schwab shares slumped 5.2% for the session. Rival TD Ameritrade Holding Corp. (NASDAQ:AMTD) fell with Charles Schwab shares, losing 5.3% of their value on Thursday.
Citigroup Inc (C)
Last but not least, Citigroup made our list of worst stocks today. The good news is, Citigroup did do something to address what many considered to be a an employee-bonus plan that was so generous it was noticeably disadvantageous to C shareholders. The bad news is, the proposed changes didn’t go quite as far as expected. Frustrated investors protested by sending Citigroup down nearly 4% for the day.
The new plan allows the company’s executives to earn a bonus worth up to more than 100% of their base pay if C shareholder returns are positive for the year in question. The new plan curbs bonus checks in the event the stock’s value is in the red for a three-year stretch. Nevertheless, the newly-proposed plan still allows for very generous bonuses, even if C doesn’t perform well for investors.
Proxy adviser Institutional Shareholder Services suggests shareholders reject the proposed plan, explaining:
“Citigroup’s pay program is ultimately discretionary and the compensation committee’s decision to award CEO Corbat his highest pay package to date is not justified by the company’s lagging stock price performance.”
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
