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Why Ensco, Mitsubishi UFJ Financial Group, and comScore Slumped Today

By Dan Caplinger – Nov 25, 2016 at 10:09AM

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The post-holiday market was strong, and these stocks led the way. Find out why.

Friday ended a successful week for the stock market, as investors who chose not to take the day off for Black Friday shopping helped send major market benchmarks to fresh new all-time record highs. Gains of about a third of a percentage point for the Dow and S&P 500 added to their record runs earlier in the week, and investors didn't see anything in the early results from the beginning of the holiday shopping season to justify reversing the positive momentum that stocks have seen lately.

However, some individual stock names didn't participate in the rally, and Ensco (VAL), Mitsubishi UFJ Financial (NYSE: MTU), and comScore (SCOR -4.31%) were among the worst performers during the holiday-shortened trading session. Below, we'll look more closely at these stocks to tell you why they did so poorly.

Image source: Ensco.

Ensco feels less energetic

Ensco dropped 5% on a bad day for energy stocks, in general, and offshore drilling stocks, in particular. Oil prices continued to show weakness, falling almost $2 per barrel, to approach the $46 mark.

Earlier in the week, decent news from offshore-drilling peer Seadrill had suggested that the worst might finally be coming to an end for the industry, which has suffered even more than the broader energy sector because of the higher costs of offshore drilling activity compared to most land-based drilling. Looking forward, it will be hard for Ensco to make much progress in recapturing some of the ground its share price has lost over the past two years until oil prices show true strength. With crude having failed to hold above $50 per barrel, it's evident that the tough conditions for energy appear likely to continue well into 2017.

Mitsubishi gets a downgrade

Mitsubishi UFJ Financial fell 6% as investors apparently reacted to negative comments about the Japanese financial giant from earlier in the week. Analysts at Goldman Sachs downgraded Mitsubishi UFJ from buy to neutral on Wednesday, putting a temporary stop to huge gains that the bank has seen so far this month. Negative interest rates in Japan have weighed on the financial sector, but investors are now anticipating a potential uptick in global macroeconomic growth, and that has spurred Mitsubishi shareholders to think that an end to the tough monetary-policy environment might be coming.

However, today's drop shows that there's no firm consensus on just how much Japanese banks could benefit from changing conditions. Until the true impact of recent events plays out in Japan and across the globe, it's uncertain whether Mitsubishi will get the benefit that its share-price advance this month would suggest is coming.

comScore deals with resignations

Finally, comScore declined 5%. The digital-intelligence specialist revealed in a filing with the SEC earlier this week that Board Chair Joan Lewis and Nominating and Governance Committee Chair Patricia Gottesman had resigned from their respective positions. The move follows an audit committee investigation of the company, which responded to concerns about the company's practices in recognizing revenue, as well as its disclosure, internal control, and employment practices.

The SEC filing said that comScore cannot support the way that certain nonmonetary transactions were accounted for, and it will also make some adjustments to monetary transactions. Although the board is looking at remedial measures to address the issues, investors don't seem entirely satisfied with the outcome of the investigation and its aftermath.

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