Why Game Stop, The TJX Companies, Inc., and Newmont Mining Are Today's 3 Worst Stocks

New competition and falling commodities prices are a few forces sending these stocks lower Tuesday

Mar 18, 2014 at 7:31PM

Even though the U.S. and the EU both started economic sanctions against Russia as the country formally annexed Crimea from Ukraine, Wall Street reminded itself that those issues were half a world away on Tuesday. Relieved that the conflict hadn't yet turned violent, all three major U.S. stock indexes and all 10 market sectors added ground today. Despite the rampant bullishness, GameStop (NYSE:GME), The TJX Companies (NYSE:TJX), and Newmont Mining (NYSE:NEM) ended as the worst performers in the S&P 500 Index (SNPINDEX:^GSPC) today. The S&P added 13 points, or 0.7%, to end at 1,872, finishing within 1% of all-time highs.

Unfortunately for GameStop shareholders, even if world leaders agreed to an eternal peace agreement and someone discovered the cure for cancer, the stock still wouldn't have fared well. Shares slumped 3.4% as investors cringed at the entrance of a new -- and extremely formidable -- competitor in the video game trade-in business. That's right, the king of brick-and-mortar retail, the $242 billion Wal-Mart itself, has decided to step into the ring with the $4.5 billion Game Stop. This is undoubtedly not good news, but it's also far from a death knell, since Game Stop has a vast game selection and a reputation with gamers.

The TJX Companies is our second-most beleaguered stock of the day, losing 2%. Incidentally, this is another company that Wal-Mart could attempt to slowly crush, but again, Wal-Mart would be facing an uphill battle against a company that's already cemented its image in the consumer's mind. TJX owns and operates chains like T.J. Maxx and Marshalls, which buy leftover name-brand merchandise and offer them in their stores at a discount. With home décor stores like HomeGoods also under the TJX umbrella, the company has a diverse range of products -- like Wal-Mart -- but sells them in stores with different names and different specialties. Not a bad strategy.

Finally, shares of Newmont Mining shed 1.9% Tuesday. Newmont owns and operates mines all across the world, specializing in gold production but dabbling in copper and silver as well. You might imagine, correctly, that such a business model relies heavily on the prices of the commodities that Newmont peddles. Investors were left with little to scratch their heads over today, as prices of gold, silver, and copper all declined. While all three commodities will likely lose value if China's economy slows too suddenly, the price of copper would be in particular jeopardy. Many Chinese companies use copper as collateral to secure loans, so if the rate of defaults rises, copper's likely going to be on sale.

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John Divine owns shares of Berkshire Hathaway. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.The Motley Fool recommends Berkshire Hathaway and owns shares of Berkshire Hathaway and GameStop. 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.

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Jun 12, 2015 at 5:01PM

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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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