5 of Last Week's Biggest Losers

There's never a shortage of losers in the stock market. Let's take a closer look at five of this past week's biggest sinkers.

Company

May 24

Weekly Loss

National Bank of Greece (NYSE: NBG  )

$1.22

49%

Cirrus Logic (NASDAQ: CRUS  )

$17.36

22%

Whiting USA Trust (NYSE: WHX  )

$5.05

19%

Halcon Resources (NYSE: HK  )

$5.54

11%

Newcastle Investment (NYSE: NCT  )

$5.27

11%

Source: Barron's.

Let's start with National Bank of Greece. Greece's largest bank shed nearly half of its value ahead of reasonable quarterly results, while its thriving Turkish unit helped steer the financial services provider to a rare profit. The shares were halted on Friday as the bank prepares to complete a recapitalization plan in the coming days.

Cirrus Logic took a logical hit after warning that its margins will be contracting. Speaking at an investor conference, Cirrus Logic's CEO warned that the cutthroat nature of smartphone component providers will drop the company's gross margins from north of 50% today to mid-40% in the future as pricing pressures kick in.

Whiting USA Trust tumbled a week after going ex-dividend. It's not necessarily surprising to see investors move on a week after a high-yielding trust shells out a quarterly distribution. Whiting's units decreased in value 13% a week earlier, and half of that was in the form of the trust's payout. It's also not a shock to see Whiting in a perpetual state of decline. The units are backed by depleting assets, and the trust will terminate once a set amount of oil and gas has been sold. However, the 19% plunge is unusual even for a company that has already gone through 77% of its production rights and will probably terminate in two years.

Halcon Resources tumbled on Thursday shortly after providing a poorly received operation update on the production of its acreage in northeast Ohio and northwest Pennsylvania. Halcon expects decent natural gas production, but the drilling for oil hasn't proved as lucrative.

Finally, we have Newcastle taking a hit after an analyst downgrade. Keefe Bruyette downgraded its rating on the stock from "outperform" to "market perform." Newcastle is a real estate financing specialist that is now trading even more below its book value, which stood at $7.07 a share as of the end of March.

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  • Report this Comment On May 27, 2013, at 7:50 PM, JABarnes48 wrote:

    Newcastles drop last week was on very low volume. I think the fundamentals on this stock suggest that all it will take is some good news and it will recover in spades. What are the analysts at Keefe Bruyette not seeing? I think it is the potential for a significant deal which will blow away the cobwebs from this company and show the shiney new engine under the hood.

    Newcastle is positioning itself to become a player in the senior housing market. They are in the process of seeking multiple acquisitions of small players in the business and plan to use as capital the remnants of its holdings in CDO's. One should expect these things to happen soon, in the next weeks. When they do the stock will skyrocket. If this stock doesn't double in the next 12 months, I'll eat my hat.

    Keefe Bruyette must be assuming that management will fail to deliver on their promises in the last 2 conference calls. Perhaps they are right and the stock will stay the same and simply pay a 10% dividend. But I would wager that the dividend will be increased the next time it is announced.

    There are just too many reasons why this REIT will trade higher.

  • Report this Comment On September 17, 2013, at 2:53 AM, AnsgarJohn wrote:

    WHX It is not exactly in the small print.

    http://www.whiting.com/whiting-usa-trust-i/faqs/

    WHX FAQ’s

    Q – How long are the trust’s distributions expected to last?

    A – Based on independent engineering at December 31, 2012, the trust is expected to terminate in June 2015. That is the estimated time when 9.11 million barrels of oil equivalent (the oil and gas reserves attributable to the trust) are expected to be produced and sold.

    Q – What will be the value of the units when the trust terminates?

    A – Zero. There will be a final cash distribution to unit owners, and the properties associated with the trust will revert back to Whiting Petroleum Corporation.

    Dividends up to $0 left

    2013 $0,50

    2014 $2,00 (4x$0,50)

    2015 $1,00 (2 x$0,50)

    Total $3,50

    Price: value $3,50 - price $4,77 is expected loss of $1,27

    ------------------------------------

    "But, people can't really be that stupid!"

    In other words: "X nr. of people can't be wrong."

    Actually no, they can be wrong. How can you profit from others outsourcing thinking?

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