Keurig's stock ran cold Tuesday. Image: Keurig Green Mountain.
The stock market remained relatively flat on Tuesday, failing to build on its gains from Monday but also fending off any efforts to give back ground. Still, several stocks posted significant declines, and Keurig Green Mountain (GMCR.DL), Vivint Solar (VSLR), and Cliffs Natural Resources (CLF -1.24%) were among the worst performers on the day.
Keurig Green Mountain fell 10%, hitting its lowest level in more than two years after analysts made negative comments about the coffeemaker specialist and its future prospects. One set of analysts argued that the company deserves to trade at less than its historical earnings multiples, given the uncertainty surrounding its Keurig Kold carbonated soft-drink system and its Keurig 2.0 brewing system. Others pointed to weakness in K-Cup sales volumes and lower prices on its brewing systems as cause for concern. With Keurig set to announce its latest earnings on Wednesday night, investors will have to look closely at how early results for Keurig Kold have gone. Already, shareholders are expecting double-digit percentage sales declines and a hefty drop in earnings, but the prospect for even worse results is weighing on the stock today.
Vivint Solar plunged 23% after reporting poor third-quarter results Monday night. The solar company continued to grow from an operational standpoint, with 24% growth in installations to 61 megawatts and a 15% rise in bookings to 71 megawatts for the quarter. Yet the company's results weren't nearly as strong as some of Vivint's residential-solar peers, and that raised concerns about the potential success of Vivint's merger with SunEdison. SunEdison stock lost a third of its value Tuesday, and since Vivint will receive about $6.61 per share in SunEdison stock and convertible notes, the value of that piece of the buyout price fell sharply as well. With even major solar players seeing their stocks struggle, Vivint's uninspiring performance didn't live up to investors' expectations for the company.
Finally, Cliffs Natural Resources dropped 12% on the day. The iron-ore producer said that it would temporarily halt production of iron-ore pellets at its Northshore Mining operation in Minnesota by the beginning of December, with plans to keep the facility closed throughout the first quarter of 2016. CEO Lourenco Goncalves blamed a number of factors for the move, including high levels of pellet inventory and the dumping of foreign steel into the U.S. market that has adversely hurt iron-ore demand among the steel producers that Cliffs supplies. In Goncalves' words, "As soon as the unfairly traded steel problem subsides and domestic steel production recovers to normal levels, we will be able to immediate ramp up iron-ore pellet production by bringing idled capacity back to operation." The idling of Northshore and United Taconite will cost Cliffs Natural about $9 million per month, however, and that's money that the ailing company can ill-afford to lose in the current tough environment.
