Why Walter Energy, JinkoSolar, and FireEye Tumbled Today

Stocks fell back further from record levels, but these stocks did much worse than the broader market. Find out why.

Jul 8, 2014 at 6:15PM

Dow 17,000 took more than seven months to achieve, but it only took two trading sessions for investors to lose their grip on the milestone, at least in the short run. After such a strong advance for the broader stock market, investors appeared ready to take some of their profits in light of the massive returns they've earned over the past several years, sending most major benchmarks down more than two-thirds of a percent today. For some individual stocks, the news was even worse, with Walter Energy (NASDAQOTH:WLTGQ), JinkoSolar (NYSE:JKS), and FireEye (NASDAQ:FEYE) all suffering large declines on Tuesday.


Walter Energy fell almost 9% as the struggling metallurgical coal company reported preliminary second-quarter production figures and announced the results of a debt offering. Walter Energy said it produced about 2.5 million metric tons of coal, with about 80% of that coming from its U.S. operations and the rest in the U.K. and Canada. With the company having started to shutter its Canadian mines in British Columbia, Walter Energy nevertheless expects to hit its target of 9 million to 10 million tons of production for the full year. But investors and analysts aren't so sure, as lower price forecasts for coal could hamper Walter Energy's ability to operate without massive losses. With the company having to pay a 9.5% interest rate on $320 million in five-year senior secured notes, bond investors are requiring a lot of extra income from Walter Energy to compensate for long-term solvency risks.


Source: JinkoSolar.

JinkoSolar also fell nearly 9% on a bad day for solar stocks generally. With the U.S. having imposed tariffs on Chinese-made solar panels, JinkoSolar has had to rely more on the domestic Chinese market for solar materials. Yet speculation that the Chinese government might reduce its target for solar installations could present even greater challenges for JinkoSolar and its peers in the Chinese solar industry. Despite dramatic improvement in JinkoSolar's fundamentals recently, the company nevertheless needs a healthy solar industry in its home country in order to help support its debt and continue to make progress toward sustained and permanent profitability.

FireEye took an 8.5% hit as the cybersecurity specialist saw continued pressure in a downdraft that has cost it about two-thirds of its value since early March. Most of the commentary surrounding FireEye doesn't have as much to do with its own specific business as it does with the momentum-based investors who've helped amplify the stock's volatility in recent months. Nevertheless, with FireEye stock trading below its levels immediately after its IPO, the company needs to start demonstrating its ability to grow as quickly as shareholders want to see in order to regain the confidence of its investor base.

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.

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.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

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.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information