Why Krispy Kreme, MBIA, and ITT Educational Services Set New Lows Today

These three stocks hit new yearly lows on Tuesday. Find out why.

Jul 8, 2014 at 8:10PM
Longview

Pullbacks for the stock market have been few and far between lately, but investors have seen a fairly substantial downward move in stocks over the past couple of days. With the stock market still very close to record highs, there aren't that many stocks setting yearly lows, but a sustained correction could make that number soar if the market finally changes gears from its buy-the-dips mentality. Already, we've seen some well-known stocks reach new lows, including Krispy Kreme (NYSE:KKD), MBIA (NYSE:MBI), and ITT Educational Services (NYSE:ESI).

Kkd Donuts
Source: Krispy Kreme.

Krispy Kreme gave up 1% as competition in the doughnut space has ramped up recently. With its most recent reports indicating that customer traffic has been on the decline, Krispy Kreme is now having to deal with aggressive expansion plans from rival Dunkin' Brands as well as other breakfast- and coffee-oriented chains. In particular, Starbucks has ramped up its food offerings once again as it tries to become a destination eatery as well as a coffee giant, and those efforts could lead Krispy Kreme to miss out on an important part of its overall business. Even with the declines, though, Krispy Kreme still stands at almost triple its share price from as recently as mid-2012.

Municipal-insurance giant MBIA fell 3.5% as investors continue to worry about the company's exposure to the Puerto Rican bond market. Puerto Rico has a huge amount of debt, but as a territory of the U.S., that debt enjoys favored status as tax-free not only for federal income tax purposes but also for state and local taxes throughout the country. The voracious appetite for tax-favored bonds led to massive debt offerings, but now, investors are concerned that the territory won't be able to repay those bonds without a huge default. In turn, to the extent that MBIA might be liable for guarantees on those Puerto Rican bonds, shareholders are nervous that a hard-fought recovery from the financial crisis might be all for nothing. With estimates of nearly $5 billion in potential exposure to Puerto Rico, MBIA will need to address investor concerns quickly in order to avoid another crisis.

G

Source: Dwight Burdette.

ITT Educational Services dropped 1.5% as trouble in the for-profit education sector continued to brew. Last week, ITT found out that because it missed a deadline to file its financial reports, it could see a drop in funding from the U.S. government, which is a key source that many of its students rely on to finance their education. The government wants ITT to account for its student-loan liability properly, but thus far, the company hasn't complied with the directive. Meanwhile, the decision from for-profit peer Corinthian Colleges to put its underperforming schools up for sale reflects just how serious regulators are about ensuring that federal aid is used in as efficient a manner as possible. ITT could continue to see heightened scrutiny until it establishes it's back on firm financial footing.

Warren Buffett just bought nearly 9 million shares of this company
Imagine a company that rents a very specific and valuable piece of machinery for $41,000 per hour. (That's almost as much as the average American makes in a year!) And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report details this company that already has over 50% market share. Just click here to discover more about this industry-leading stock, and join Buffett in his quest for a veritable landslide of profits!

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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

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.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

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. The show is also heard weekly on dozens of 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. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers