The new week got started on a bullish foot, though not convincingly so. The S&P 500 eked out a gain of 0.16% to finish the session at 2,480.91, not so much because the news was good, but because there wasn’t any bad news to suggest the rally is running into a headwind.
Not every name mustered a gain on Monday though. In fact, for some it wasn’t even close. Intrepid Potash, Inc. (NYSE:IPI), Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) and Marathon Oil Corporation (NYSE:MRO) were doomed from the start of today’s trading.
Here’s a look at what went wrong for each.
Marathon Oil Corporation (MRO)
All in all it wasn’t a horrible day for oil. Crude prices slumped on the order of 0.8%, remaining in the middle of a long-term trading range, after the U.S. dollar tacked on a second daily gain. But, that was enough to spook investors of energy stocks.
Pioneer Natural Resources (NYSE:PXD) was off 4.2% for the day, making it the biggest loser in terms of raw performance among large-cap energy names, though small-cap oil outfit Whiting Petroleum Corp (NYSE:WLL) took a 6.1% hit. In terms of total market cap lost and total volume traded though, it was Marathon Oil that did the most damage to the most shareholders, losing 4.2% of its value on significant volume.
The industry-wide lull quelled a budding rebound effort for most of these stocks before it had a chance to get going in earnest.
Teva Pharmaceutical Industries Ltd (ADR) (TEVA)
If it seems like Teva Pharmaceutical has earned a spot on the daily worst three list more than once of late, you’re not crazy — it was one of the biggest losers on Thursday, and was on this list in mid-July when AstraZeneca plc (ADR) (NYSE:AZN) CEO Pascal Soriot decided to stay put rather than take the helm at Teva. In fact, TEVA stock has now lost ground in eight consecutive trading sessions thanks to today’s 9.8% setback.
The prod? Mostly Morgan Stanley, which effectively kicked Teva while it was down by saying it could still lose another 16% before the bleeding finally stopped — the firm established a price target of $16 on TEVA stock.
Analyst David Risinger explained:
“Despite the stock collapsing by 34% since 2Q:17 results on Aug. 3, we believe Teva’s current ~8.2x EV/2018e EBITDA… is still too high as the multiple is marginally above than 5-year historical average of 8x, which includes 2014-2015 — during which time the generic industry enjoyed price inflation and gCopaxone risk was further away.”
Intrepid Potash, Inc. (IPI)
Last but not least, just when it looked like a rebound was going to reach full speed, something comes along and pulls the rug out from underneath Intrepid Potash. Specifically, after gaining 170% from March’s low, IPI lost a whopping 16.2% today in response to a bearish call from UBS.
Analyst John Roberts concedes that a bankruptcy filing is far less likely now, but also believes the market is pricing in a better turnaround than is actually in the cards. Roberts is also worried that its current valuation is above the stock’s long-term norm.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.