Why Potbelly, Tile Shop Holdings, and Fortuna Silver Mines Tumbled Today

The stock market recovered from much bigger losses earlier in the day, but these three stocks didn't stand a chance. Find out why they fell.

Jul 10, 2014 at 7:25PM
Longview

On Thursday, stock market investors initially panicked on news from Europe that suggested that a potential new financial crisis might arise involving the Portuguese banking system. Throughout the day, though, U.S. markets steadily recovered. While the market still finished down, declines were generally in the range of half a percent or less. Still, some high-profile investors are starting to look for a possible correction, and for Potbelly (NASDAQ:PBPB), Tile Shop Holdings (NASDAQ:TTS), and Fortuna Silver Mines (NYSE:FSM), the overall market's partial recovery was too little to save them from large drops today.

Pbpb

Potbelly plummeted 25% as the sandwich-store chain cut its guidance for the second quarter, saying that same-store sales fell 1.6%, and that net income would fall by almost 30% from year-ago levels. Moreover, Potbelly cut its full-year guidance, as well, with earnings per share likely to fall short of last year's levels by nearly half, and full-year comps coming in flat, at best. After having wooed IPO investors with the promise of being another high-growth fast-casual chain, Potbelly has started having growing pains, and unless the company can start earning better profits from its sales, the stock could potentially have even further to fall.

Tile Shop Holdings fell 9% in sympathy with other stocks in the home-improvement space, with one of its major flooring peers falling even more dramatically today after reporting weak traffic figures, and poor same-store sales for the second quarter. Even as the housing market has recovered, investors now fear that home renovation and remodeling activity might be lagging behind the home-price gains we've seen during the past year. Unless Tile Shop Holdings can differentiate itself from its competitors, it's likely to suffer some of the same headwinds that have hit the whole industry in recent months.

Fsm

Fortuna Silver Mines dropped 10% despite precious metals generally having a strong day. Fortuna gave its preliminary production report for the second quarter, saying that it produced 1.6 million ounces of silver, and slightly more than 8,500 ounces of gold during the quarter, bringing its midyear production totals to around 52% to 53% of Fortuna's previous full-year guidance. Yet, as solid as these results were, they weren't enough to sustain Fortuna's upward momentum, with the stock having risen more than 70% in less than two months before today's drop. Fortuna Silver Mines has plenty of growth potential, but high valuations could prevent new shareholders from participating in that growth as much as those who bought at recent lows.

Warren Buffett: This new technology is a "real threat"
At his recent annual meeting, Warren Buffett admitted 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 more than $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping into 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 has no position in any stocks mentioned. The Motley Fool recommends Tile Shop Holdings. The Motley Fool owns shares of Tile Shop Holdings. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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