Why Acuity Brands, Fidelity National Financial, and Chesapeake Energy Shares Tumbled Today

Even as the stock market hit all-time record levels, these stocks saw their share prices fall -- but two of them had good excuses.

Jul 1, 2014 at 6:35PM

Stocks soared on Tuesday, with the Dow narrowly missing the 17,000 level and both it and the S&P 500 reaching new all-time closing highs. Even as investors celebrated the beginning of a new quarter, though, not every stock managed to post such impressive gains. In particular, Acuity Brands (NYSE:AYI), Fidelity National Financial (NYSE:FNF), and Chesapeake Energy (NYSE:CHK) saw the most extreme share-price declines on the day, although for Fidelity National and Chesapeake Energy there were extenuating circumstances justifying the drop.


Source: Acuity Brands.

Acuity Brands dropped 15% after reporting disappointing results for its fiscal third quarter. Revenue climbed 11.5%, sending net income up 38%, yet the maker of lighting products fell well short of the even faster growth that investors had hoped to see from the company. CEO Vernon Nagel argued that the results were consistent with the company's longer-term strategy to encourage adoption of LED lighting and boost its leadership in the lighting space. Yet the path to LED lighting might be more difficult that Acuity is projecting, given the fact that consumers have already been asked to replace incandescent bulbs with compact fluorescents and could be reluctant to make yet another costly switch.

Fidelity National Financial saw its share price drop 13%, but the decline was largely due to the title-insurance provider's distribution of tracking stock of its Fidelity National Financial Ventures affiliate. As a result of the move, shareholders in Fidelity National Financial will receive one share of FNFV Group stock for every three shares of Fidelity National stock owned prior to the split. Based on where FNFV shares finished the day, Fidelity National Financial actually gained ground on Tuesday, and the split will enable investors to choose which part of the company's business areas they want exposure to within their portfolios.

Source: Chesapeake Energy.

Similarly, Chesapeake Energy shares saw their price decline by 6%, but that decline came as a result of Chesapeake's spinoff of its Seventy Seven Energy oilfield services business. Under the spinoff, shareholders of Chesapeake will get one share of Seventy Seven Energy for every 14 shares of Chesapeake stock they owned, and based on today's close, the value of Seventy Seven Energy shares received will all but completely offset the drop in Chesapeake's share price. The move represents yet another way in which Chesapeake has made moves to focus on its most promising assets, divesting or spinning off non-core assets to help make the surviving entity leaner and more agile.

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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.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

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."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

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." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

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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