Why Snap Inc (SNAP), Deutsche Bank AG (USA) (DB) and American Airlines Group Inc (AAL) Are 3 of Today’s Worst Stocks

The bears growled early on Monday morning, striking new fear into the hearts of worried investors. By the time the closing bell rang though, the growl was pared back to a mere grumble. The S&P 500’s close of 2,375.31 was 0.33% lower than Friday’s closing value.

Why Snap Inc (SNAP), Deutsche Bank AG (USA) (DB) and American Airlines Group Inc (AAL) Are 3 of Today's Worst StocksNot every name sidestepped a setback today, however. Deutsche Bank AG (USA) (NYSE:DB), American Airlines Group Inc (NASDAQ:AAL) and Snap Inc (NYSE:SNAP) were all hit rather hard following some unexpected reality checks.

Snap Inc (SNAP)

After a very well publicized IPO last Thursday and two big bullish days off trading on the open market, Snapchat parent Snap saw its stock pull back to the tune of 12.3% on Monday.

It is, more than anything else, the usual post-IPO volatility. And although Snap shares are undoubtedly overvalued on a fundamental basis, SNAP shares themselves may not have reached their ultimate top before the almost-guaranteed post-IPO pullback. The cautioning rhetoric that couldn’t be heard in the immediate echoes of the IPO were a big reason the bulls stalled on Snap today. But, Morningstar analyst Ali Mogharabi effectively summed up the commentaries today, saying:

“… there is no guarantee that Snap will effectively monetize these users on a consistent basis. In turn, we are not yet convinced about the firm’s ability to generate excess returns on capital over the next decade.”

American Airlines Group Inc (AAL)

American Airlines Group dished out the most pain to investors on Monday, in terms of the total amount of market cap lost. It was rival Delta Air Lines, Inc. (NYSE:DAL) that did the deed, however, serving up an outlook that left investors worried that the same headwind Delta is facing has to be working against American Airlines as well.

For the quarter currently underway, Delta Air Lines has dialed back its operating margins from a range of between 11% and 13% to a range of only between 10% and 11%. The company notes fuel prices have advanced more than $20 per barrel since the same quarter a year earlier, and that fares haven’t offset that rise in operating costs.

The company still feels like things will rebalance during the second half of the year, but investors aren’t convinced. DAL ended the day 2.5% lower, and AAL ended the day down 3.2%.

Deutsche Bank AG (USA) (DB)

Finally, although few will disagree that Germany’s Deutsche Bank can afford to do nothing while its condition deteriorates, if today’s 3.8% setback from DB is any indication, the action the company decided on isn’t the one shareholders were hoping for.

On Monday, Deutsche Bank unveiled a turnaround plan … well, goal, to bolster itself and its marketing efforts, particular in Germany. The catch? It’s issuing $8.5 billion worth of rights to fund the plan, which it had previously told shareholders it would prefer not to do.

The entire offering, if fully exercised, could inject a total of 687 million new shares of DB into the current total of roughly 1.4 billion outstanding shares. That’s a lot of dilution potential.

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

Article printed from InvestorPlace Media, https://investorplace.com/2017/03/why-snap-inc-snap-deutsche-bank-ag-usa-db-and-american-airlines-group-inc-aal-are-3-of-todays-worst-stocks/.

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