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Why Boise Cascade,, and Genworth Financial Slumped Today

By Dan Caplinger – Oct 24, 2016 at 6:16PM

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Despite a rising market today, these stocks finished lower. Find out why.

The stock market gained ground on Monday, with the Dow picking up 77 points and the Nasdaq climbing by nearly 1%. Fairly favorable economic data supported the idea of continued gains for the U.S. economy, but a set of huge corporate buyouts highlighted the importance that merger and acquisition (M&A) activity has played in helping to push the stock market lately. Yet even amid the generally positive mood, some stocks weren't able to join in the celebration. In particular, shares of Boise Cascade (BCC 0.47%), (SOHU -2.39%), and Genworth Financial (GNW -0.20%) were among the worst performers of the day.

Image source: Boise Cascade.

Boise Cascade falls short

Boise Cascade fell 13% after the wood products and building materials specialist reported its third-quarter financial results Monday morning. The company posted an 8% gain in sales, but net income fell by more than half, resulting in earnings of $0.26 per share. The main culprit for Boise Cascade was its wood products segment, which saw flat revenue and took the brunt of the hit on income. By contrast, the building materials distribution business did universally well, providing double-digit percentage gains on both the top and bottom lines for the segment. CEO Tom Corrick pointed to certain raw material costs, planned downtime in production, and necessary transitions from recently acquired production facilities as contributing to the sluggish results, but Boise Cascade remains confident about its 2017 prospects. takes a loss dropped 7% in the wake of releasing its third-quarter financial report. The Chinese internet company reported a 21% drop in year-over-year revenue during the third quarter, with especially large reductions in sales from its brand-advertising and online game areas. CEO Charles Zhang pointed to a "challenging operating climate that mainly affected our online advertising business," but he also said that most of its business units made substantial progress during the quarter. Nevertheless, Sohu still posted an adjusted net loss of $29 million, reversing a year-earlier profit and disappointing those investors who had expected a much more favorable result. With the company expecting further losses for the fourth quarter, Sohu will have to work hard to regain investors' confidence going forward.

Genworth gets an offer it can't refuse

Finally, Genworth Financial fell 8%. The insurer received a buyout bid from industry peer China Oceanwide Holdings Group, and although M&A activity usually boosts shares, investors were less than thrilled with the bid. The deal will pay Genworth holders just $5.43 per share in cash, representing a 4% premium to its closing price on Friday. Genworth does face several uncertainties, including high levels of debt that is set to mature soon. However, with a much higher book value than its current share price, Genworth might find it difficult to persuade its shareholders to approve a deal that is so unexciting compared to how the stock has traded lately.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends 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.

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