Why Potbelly, SM Energy, and Navios Maritime Holdings Tumbled Today

The stock market gave up early gains after the release of the latest Fed minutes, but these stocks suffered much bigger drops than most of the market. Find out why here.

Feb 19, 2014 at 8:30PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

Wednesday's stock market moves resembled a roller-coaster ride, with an initial gain giving way to losses for major-market indexes as news from the Fed failed to inspire bulls to buy stock. For Potbelly (NASDAQ:PBPB), SM Energy (NYSE:SM), and Navios Maritime Holdings (NYSE:NM), though, the losses were much more dramatic than those of the overall market.

Potbelly fell almost 9% as the newly public sandwich-restaurant chain disappointed investors with its quarterly results. Same-store sales growth of 0.7% wasn't nearly enough to satisfy shareholders, given the stock's pricey valuation. Moreover, even adjusting for the expenses of going public, profits fell around 20% from year-ago levels. Forward guidance looked equally gloomy, as the same poor weather that hurt results in the fourth quarter have persisted this quarter as well. After the drop, some investors are starting to consider Potbelly from a value-stock perspective, but high-growth investors are nervous about its future.

SM Energy plunged 17% after announcing its fourth-quarter results last night. The exploration and production company's average production figures were within the guided range, but costs were higher than expected, disappointing investors despite a near tripling of adjusted net income from the year-ago quarter. In addition, concerns about the stock's continued ability to produce more lucrative oil and liquids at its Eagle Ford wells led analysts at KeyBanc to downgrade the stock as well. One big question going forward is whether SM Energy can take advantage of rising natural gas prices, as that could be a further opportunity for the company.

Navios Maritime Holdings dropped 12% as the shipping company missed earnings estimates in its fourth-quarter report this morning. Despite efforts to keep costs under control, Navios' adjusted net loss ballooned to more than $18 million, up from just $1 million in the year-ago quarter. But revenue from its drybulk vessel operations jumped 14%, with improving time-charter equivalent rates pointing to a potential rebound in the long-suffering shipping industry. Still, falling revenue from Navios' logistics business weighed on the company's results, and Navios needs to make further progress in order to convince investors that the shipper is back for good.

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Dan Caplinger and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

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This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

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KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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