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Considering coal was the top-performing sector last week, with Alpha Natural Resources (NASDAQOTH: ANRZQ ) surging 20% and Peabody Energy (NASDAQOTH: BTUUQ ) rising 13%, it may be surprising to see that the non-ferrous-metals sector -- uranium and copper miners in particular -- was the worst performing one.
With the Dow Jones Industrial Average (DJINDICES: ^DJI ) rising 1% at the same time, these were some significant departures. But coal got a boost from reports showing that U.S. and Canadian tax policy might actually create a windfall for coal miners who are big exporters to China. Peabody is one of the biggest.
Freeport-McMoRan Gold & Silver (NYSE: FCX ) was one of the biggest metals losers last week, plunging 18% after it announced the acquisition of McMoRan Exploration (UNKNOWN: MMR.DL ) and Plains Exploration & Production (UNKNOWN: PXP.DL2 ) . And where big uranium stocks such as Cameco (NYSE: CCJ ) and Uranium Energy (NYSEMKT: UEC ) were up on the week, many smaller players plummeted.
A palace coup
Yet over the past five trading days, some stocks managed to do even better than the coal sector's 7% jump and worse than the non-ferrous metals sector's 17% plunge.
On the high side, McMoRan was actually one of the best performers for the week, running 80% higher on Freeport's premium purchase price, but oil and gas driller SandRidge Energy (UNKNOWN: SD.DL ) also enjoyed some blowout numbers, soaring 25% as speculation of a takeover also took over the stock.
Hedge fund operator TPG-Axon Management, which owns almost 7% of SandRidge's stock, wants to oust the entire board of directors immediately and without cause. As they've presided over the company's virtual demise -- it had lost nearly half of its value at one point before the hedge fund began agitating for change last month (and more than three-quarters of its value from its IPO five years ago) -- it's time for a new direction. "An outright sale of the company is the most realistic path to restoring the shareholder value that has been destroyed," TPG says.
Similar to the moves Chesapeake Energy (NYSE: CHK ) and EOG Resources (NYSE: EOG ) have made, SandRidge has largely abandoned the natural gas industry in favor of the better economics of oil drilling and production. Yet like Chesapeake, many shareholders are also upset at the lavish compensation bestowed on management during a period of value destruction, and its debt load has become burdensome to performance.
Selling as it does at a discount to a conservative estimate of its net asset value to its enterprise value, its new higher valuation based on takeover chatter becomes an intriguing investment.
Not surprisingly, though, SandRidge sought to protect entrenched management by adopting a poison-pill defense if someone tries to take over the company. With an acquisition more difficult now, the gains the energy stock has seen may plunge like the thermometer on a winter night.
A perfect storm
At the other end of the spectrum, TIBCO Software (UNKNOWN: TIBX.DL ) managed to eke out a loss to the metals sector after reporting that preliminary earnings will miss big, blaming the shortfall on Hurricane Sandy and government spending cutbacks.
The cloud-computing software specialist forecasted revenue in the range of $292 million to $295 million, well below the $316 million Wall Street was expecting, while adjusted earnings per share would be either $0.37 or $0.38, again falling short of the $0.44 mark that had been anticipated.
Europe remains a strong region for TIBCO, even if North America continues to be soft, and as management notes, it has posted 17 consecutive quarters of consistent growth. So while management is also disappointed in its results, perhaps it ought to be excused for one quarter of messed-up expectations. Of course, I've also previously noted that it placed the blame for its domestic performance on the division president it gave the boot to last quarter, and though it may take some time to straighten things out, it may be more of a problem than just one person.
Let me know in the comments box below whether you think TIBCO Software is suffering a temporary lapse, or whether this is the sign of worse problems to come.
Read all about it!
Investors were startled after SandRidge plummeted when natural gas prices reached 10-year lows, but with the company halfway through its ambitious three-year plan to profitability, the future looks bright. If you're unsure about the future of this emerging oil and gas junior and are looking to find out more about its strengths and weaknesses, view this brand-new premium report detailing SandRidge's game plan and what to expect from the company going forward. To get started, click here!