Despite the very rough start to the new trading day, and week, the bulls managed to push back a little. By the time the closing bell rang, the S&P 500 was at 2,341.59, down 0.10% and well off its intraday low of 2,322.25
Not every stock out there recovered from an early morning tumble, however. Freeport-McMoRan Inc (NYSE:FCX), G-III Apparel Group, Ltd. (NASDAQ:GIII) and Frontier Communications Corp (NASDAQ:FTR) all fell too much to stage a meaningful recovery.
Here’s what upended each name.
Frontier Communications Corp (FTR)
Still feeding off the bad news that undermined shares last week, small cap telecom name Frontier Communications lost more ground today.
At the heart of the weakness is growing concern that Frontier Communications won’t be able to continue paying its dividend, prompting a downgrade of FTR from Goldman Sachs. Analyst Brett Feldman now rates the stock a “Sell” on concerns that the company will have to cut its dividend payout to beef up its liquidity.
With today’s 3.3% selloff, FTR shares have fallen 14% since Goldman’s downgrade. Feldman’s new price target is $1.50. The stock closed at $2.00 on Monday, suggesting a 25% haircut from current levels could still be in the cards.
Freeport-McMoRan Inc (FCX)
Don’t look for anything mining outfit Freeport-McMoRan did today to prompt the 4.7% tumble FCX shares took, other than being in the wrong place at the wrong time. Most materials and commodity stocks were down, despite the dollar’s drubbing, on fears that President Trump’s entire agenda could be a non-starter now that his Obamacare replacement plan showed up DOA.
That being said, FCX did make for an unusually easy target. The contentious negotiations between the company and Indonesia’s regulators have turned hostile, with the country’s government now saying it wants complete control of the high-potential Grasberg mine within the next two years. The company was hoping it would be able to come to some sort of mutually beneficial agreement, but that’s not looking likely at this point.
G-III Apparel Group, Ltd. (GIII)
Last but not least, the broad retail rout continues to claim victims. Today’s target was apparel maker G-III … the name behind brands like Donna Karan, and the embattled clothing lineup from Ivanka Trump. The company’s full-year outlook was as disappointing as its fourth-quarter results were, prompting a 14.1% selloff of GIII shares.
For the three-month period ending in January, G-III Apparel lost 16 cents per share on sales of $603.3 million. The top line was up 14%, but fell short of the $622.8 million the pros were looking for. Worse, the swing to a 16 cent loss per share of GIII fell well short of the loss of 10 cents per share analysts had estimated.
Looking ahead, G-III Apparel Group anticipates reporting a profit of between 80 cents and 90 cents per share this year, versus analyst estimates for a profit of $1.34 per share of GIII.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.