Although volume was once again light, the Santa Claus rally rolled for a second day today following decent GDP growth reports for the third quarter and despite a lull in last month’s sales pace of existing homes. By the time the closing bell rang, the S&P 500 was at 2038.97, up 0.88%.
Tuesday wasn’t a winner for all stocks, however. Sunedison Inc. (NYSE:SUNE), Steelcase Inc. (NYSE:SCS) and Chipotle Mexican Grill, Inc. (NYSE:CMG) all got hit pretty hard. Here’s what investors need to know.
Chipotle Mexican Grill, Inc. (CMG)
Just when it looks like Chipotle Mexican Grill has put its E. coli gaffe in the rearview mirror, it comes back to haunt it. CMG shares fell more than 5% on Tuesday following reports that the restaurant has been linked to yet another breakout of the intestinal infection.
The news was posted Monday evening; the Center for Disease Control, even before the ink had dried on the assessment of an E. coli breakout from early November, was investigating another one in the Kansas/North Dakota/Oklahoma area that linked five ill people who had all eaten at a Chipotle restaurant in mid-November.
This is the third distinct outbreak CMG shareholders have dealt with this year, with the last two being back-to-back. That’s more than enough to mar the restaurant chain’s reputation for a long while, prompting a downgrade from J.P. Morgan today. J.P. Morgan analyst John Ivankoe cut his opinion on CMG from overweight to neutral, and lowered his target price to $555 per share.
Sunedison Inc. (SUNE)
Much like CMG, just when you think things can’t any worse for solar power player Sunedison, they get worse. SUNE shares ended the day down 21% on the heels of reports that a major hedge fund and SUNE shareholder had requested to see documents related to some of the recent deals the company had made.
That hedge fund was Appaloosa Management, managed by David Tepper… something of name on Wall Street. Though the request in itself doesn’t conclude guilt or wrongdoing, the market’s “where there’s smoke, there’s fire” mentality didn’t take long to do some serious damage to SUNE stock.
Tepper’s contention is that Sunedison is using its recently-formed spinoff and business partner TerraForm Power Inc (NASDAQ:TERP) in a way that overinflates how well Sunedison is actually doing.
Steelcase Inc. (SCS)
Last but not least, Steelcase was, unfortunately, reminded on Tuesday that its third-quarter earnings season isn’t quite over, yet. SCS shares fell 23% following the furniture maker’s fiscal Q3 report.
All told, Steelcase earned 30 cents per share on $787.6 million in revenue last quarter. Analysts, however, were calling for a bottom line of 32 cents per share of SCS on sales of $812.95 million.
It was guidance for the current quarter, however, that may have been responsible for the bulk of the damage done to SCS today. The company said it’s only looking for earnings of 20-24 cents per share for fiscal Q4, and $720 million-$745 million in sales. Analysts had modeled for $771.9 million in revenue, on average, and per-share earnings of 26 cents.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
