The first day back from a long holiday weekend was a tepid, though slightly bearish, one. With no real news on tap, traders were content to let the S&P 500 slide 0.22% lower to a close of 2056.61.
But it could have been worse. You could have owned Valeant Pharmaceuticals Intl Inc (NYSE:VRX), Freeport-McMoRan Inc (NYSE:FCX) or Kinder Morgan Inc (NYSE:KMI). These three names lost more ground than the broad market did Monday.
Here’s why.
Valeant Pharmaceuticals Intl. Inc. (VRX)
Just when it looked like Valeant Pharmaceuticals might be out of the woods in the court of public opinion, the company makes an announcements regarding its CEO that — in light of the timing — looks a little suspicious (not to mention concerning) to VRX shareholders. That announcement? CEO Michael Pearson is taking time off for medical leave. Specifically, he’s taking time off to fight what’s described as a severe case of pneumonia.
Though some have chided the news as a cop-out, or an excuse to circumvent the stress inherent with the role right now, most don’t doubt the validity of the announcement. Most are still concerned, however, with the lack of proposed timeframe of the time away, and the fact that the company will be led by a trio of VRX executives.
With Valeant Pharmaceuticals’ very business model under attack from several directions, it’s the worst possible time for such a disruption. VRX lost more than 10% of its value on the heels of the news.
Kinder Morgan Inc. (KMI)
Just when it looked like crude oil prices might be ready to bounce — and energy stocks like Kinder Morgan along with it — something comes along to pull the rug out from underneath the rebound effort.
Nothing specific did the deed. Rather, crude prices simply fell more than 3% as echoes of oversupply and OPEC’s stubbornness continues to ring. After three straight days of gains in the middle of last week, unrecognized profits and lingering uncertainty about the future of oil was enough reason to put the sellers back to work. KMI followed that lead, losing more than 5% of its value on Monday.
KMI wasn’t the worst performing stock within the energy sector, but Kinder Morgan was the biggest company among the day’s biggest loser, dishing out the most pain to the most people.
Freeport-McMoRan Inc. (FCX)
Last but not least, like crude oil, copper prices have been miserably low for too long now. That bearish backdrop only makes the news from Freeport-McMoRan that much more troubling — chairman and founder James Moffett is stepping down, for good. To what extent it was Moffett’s decision is unclear. But, a statement from the company did confirm that the Board of Directors came to 77-year old Moffett with the idea. The news sent FCX more than 9% lower.
Moffett had been CEO of Freeport-McMoRan between 1995 and 2003, and more so than any other individual is synonymous with the company.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
