Why bebe stores, Tower Group International, and Rayonier Hit New Lows Today

These three stocks fell below their worst levels of the year Monday. Find out why.

Jun 30, 2014 at 7:42PM

Stocks held up reasonably well on Monday, with Nasdaq managing to gain slightly even as the S&P 500 and Dow Jones Industrials eased lower. All in all, the number of stocks hitting new yearly highs greatly outnumbered those reaching new lows for the year. But there were still a few stocks plumbing new depths, and among them were bebe stores (NASDAQ:BEBE), Tower Group International (NASDAQ:TWGP), and Rayonier (NYSE:RYN).


For bebe stores, today's 3% decline came after the retailer said after the market's close on Friday that it would abandon its lower-scale 2b concept, closing its 16 remaining stores in the 2b chain and focusing instead on trying to improve results at its namesake bebe business. As part of a broader restructuring, bebe stores will reduce its employee count in order to cut costs more generally, with 9% of the company's non-store corporate and field management staff expected to be affected by the move. Interim CEO Jim Wiggett hopes that the dual moves will put bebe in a better position financially to handle a tough retail environment, but extensive competition in the retail space will force bebe to work hard in order to convince investors that the stock's 50% plunge just since April represents a buying opportunity rather than a value trap.

Tower Group International fell another 11%, bringing its total losses over the past year to roughly more than 90%. The insurance and reinsurance specialist has been under pressure financially for a long time, and even though the company agreed to an acquisition from ACP Re at $2.50 per share, shareholders are worried that the proposed deal won't come to fruition. One concern that some have is that an "insolvency event" as defined under the parties' merger agreement might give ACP an out to cancel the deal or negotiate another price reduction. Meanwhile, regulators are scrutinizing Tower Group's business to ensure that policyholders are protected, and their actions only complicate the volatile situation.

Lumber Sean Mack
Image source: Sean Mack.

Rayonier's share price plunged about 27% from Friday's levels, but investors shouldn't panic about the move. The timber company's plan to spin off shares of Rayonier Advanced Materials was completed today, and so the share price going forward now reflects Rayonier's remaining core business after the spinoff. Long-time shareholders will receive one share of Rayonier Advanced Materials for every three Rayonier shares they owned before the spinoff, and the new company will contain Rayonier's performance-fibers business while Rayonier holds onto its forest resources and real-estate businesses. Rayonier did get downgraded today, but the real economic impact for shareholders was far less than the big share-price drop would suggest.

Warren Buffett: This new technology is a "real threat"
At the recent Berkshire Hathaway annual meeting, Warren Buffett said this emerging technology is threatening his biggest cash cow. While Buffett shakes in his billionaire boots, only a few investors are embracing this new market, which experts say will be worth over $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping on to one company that could get you the biggest piece of the action. Click here to access a free investor alert on the company we're calling the brains behind the technology.

Dan Caplinger owns shares of Berkshire Hathaway. The Motley Fool recommends and owns shares of Berkshire Hathaway. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers