Still unsure if Tuesday’s selloff was a warning or if Wednesday’s rebound was an omen, traders were content to mostly sit back today and let stocks drift. By the time the closing bell rang, the S&P 500 had recouped the bulk of its intraday loss to finish the session at 2,120.79, down a mere 0.13%.
It wasn’t an uneventful day for all stocks, though. Broadcom Corporation (NASDAQ:BRCM), Terex Corporation (NYSE:TEX) and Flowers Foods, Inc. (NYSE:FLO) all fell deep into the red, each for its own unique reason. Here’s what investors need to know.
Broadcom (BRCM)
After having another day to crunch the numbers and chew on the details of the deal, Broadcom shareholders aren’t quite as stoked the company is being acquired by rival Avago Technologies Ltd (NASDAQ:AVGO). BRCM shares fell nearly 2% on Thursday after soaring 21% on Wednesday when buyout announcement was made.
In retrospect, a pullback from Broadcom can’t be a total surprise. The offer from Avago was a combination of AVGO shares and cash that was mathematically worth $54.50 per share of BRCM. But, Broadcom shares closed at $57.15 on Wednesday … almost 5% above the tender offer.
While the bulls were willing to push BRCM above that price yesterday, making the argument that synergies would justify the excessive price, investors reconsidered today.
Terex Corporation (TEX)
Here’s a free tip to any company’s executive management team: Most of the time your investors know when you’re struggling — there’s no need to voluntarily underscore that fact by using alarming language like “challenging environment.”
It’s a lesson the folks at the helm of Terex Corporation are learning the hard way today. TEX shares fell more than 7% after the crane-maker presented at this year’s KeyBanc’s Industrial, Automotive and Transportation Conference, observing it was in a challenging environment characterized by “difficult end market demand.”
Taking those comments at face value, TEX shareholders were more than happy to rid themselves of the challenged company today.
Flowers Foods (FLO)
Despite the bakery company’s assurances it was still on track to post the full-year numbers it previously said were in store, the market’s not buying the optimism from Flowers Foods. And, given last quarter’s results from FLO, investors’ doubt is well justified.
In its first fiscal quarter of 2015, Flowers Foods earned 29 cents per share on $1.15 billion in sales. Problem: Analysts were collectively looking for a top line of $1.17 billion and a profit of 30 cents per share.
The shortcoming didn’t affect the numbers Flowers Foods still expects to post for 2015, though. The company still plans on generating a profit of between 96 cents and $1.01 per share of FLO, versus analyst expectations of 97 cents. And the company is modeling revenue of somewhere between $3.786 billion and $3.86 billion in sales, versus an analyst consensus of $3.8 billion.
The rosy outlook fell on deaf ears, however, as FLO finished the session down by more than 6%.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
