Why Tesla Motors Inc. (TSLA), Marathon Petroleum Corp. (MPC) and Lowe’s Companies, Inc. (LOW) Are 3 of Today’s Worst Stocks

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While stocks got off to a bearish start this morning on the heels of a disappointing ISM services report and a downright pessimistic outlook from New York Federal Reserve Bank President Bill Dudley, after having had some time to think about it, the bulls decided the glass was half-full rather than half-empty. The S&P 500 ended the day at 1912.53, up 0.5%

Why Tesla Motors Inc. (TSLA), Marathon Petroleum Corp. (MPC) and Lowe's Companies, Inc. (LOW) Are 3 of Today's Worst StocksNot every stock ran with the bulls later in the day, however. Marathon Petroleum Corp. (NYSE:MPC), Lowe’s Companies, Inc. (NYSE:LOW) and Tesla Motors Inc. (NASDAQ:TSLA) all started the day out underwater, and were still there by the time the closing bell rang. Here’s what investors need to know.

Marathon Petroleum Corp. (MPC)

Despite the strong rebound in the price of crude oil today, Marathon Petroleum shares didn’t follow the energy sector’s bullish lead. Instead, MPC shares fell more than 8% following the company’s disappointing fourth quarter results and even more disappointing news that one of its units would be dialing back its dividend.

Earnings actually rolled in better than expected. The company posted an operating profit of 79 cents per share of MPC versus analyst estimates of 67 cents. Revenue, however, came up short of the anticipated $16.54 billion. The pros were calling for a top line of $16.54 billion.

The bulk of the damage done to MPC on Wednesday, however, stemmed from news that pipeline company MPLX LP (NYSE:MPLX) was cutting its previous dividend/distribution guidance in half for 2016. In that Marathon Petroleum is the general partner of the MLP, the two companies’ fortunes are linked. What’s bad for MPLX and its shareholders s similarly bad for MPC and its owners.

Lowe’s Companies, Inc. (LOW)

At another time and in a different situation, news that Lowe’s Companies was expanding would have been met with cheers, with LOW shareholders ignoring the fact that the company was spending $2.3 billion in cash to enter a new market. With fears that a recession is right around the corner though, the market is jeering this morning’s announcement that Lowe’s is acquiring Canadian hardware store chain Rona.

Shareholders have no fundamental problem with targeting the Canadian market. Rival Home Depot Inc. (NYSE:HD) already has a much larger presence there, and the longer Lowe’s waits, the more difficult it becomes to compete.

At issue is the price Lowe’s is paying. The home improvement retailer is offering more than a 100% premium to the closing price of Rona shares just yesterday.

LOW closed 6% lower today.

Tesla Motors Inc. (TSLA)

Last but certainly not least, Tesla Motors extended what’s now become a month-long losing streak for the stock, with TSLA shares losing 5% of their value today to reach a new 52-week low.

Today’s weakness is actually a follow-on from yesterday’s bearish response to a warning from Pacific Crest that noted:

“We’d continue to avoid Tesla. The beginnings of potentially lagging demand, combined with likely persistent production challenges, keep us avoiding Tesla. If we get further evidence of a lack of demand, the stock could see a significant downward re-rating, which reinforces our caution at the moment.”

That comment echoed a similar sentiment from Morgan Stanley analyst Adam Jonas, who just the day before lowered his price target on TSLA from $450 to $333 based on concerns of diminishing demand.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/02/tesla-motors-inc-tsla-marathon-petroleum-corp-mpc-lowes-companies-inc-low-3-todays-worst-stocks/.

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