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Why American Outdoor Brands, Tellurian, and National Beverage Slumped Today

By Dan Caplinger - Updated Dec 8, 2017 at 5:05PM

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Learn what sent the company behind the Smith & Wesson brand lower.

Friday was a good day for the stock market as a whole, as investors reacted favorably to the latest numbers on job creation. The Bureau of Labor Statistics said before the market opened that the U.S. economy added 228,000 jobs to its nonfarm payrolls during November, while relatively sanguine wage inflation suggested that the Federal Reserve might have room to slow the pace of future interest rate increases to fight off any chance of economic overheating. Hopes for successful tax reform also bolstered the markets, with major benchmarks climbing around half a percent. Yet some companies reported bad news that led them to miss the rally, and American Outdoor Brands (SWBI -3.56%), Tellurian (TELL -0.82%), and National Beverage (FIZZ 0.18%) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.

Expected gun-sales weakness sends American Outdoor plunging

American Outdoor Brands stock finished down almost 10% after the company behind the Smith & Wesson brand of firearms reported its fiscal second-quarter financial results. The maker of guns and other outdoor lifestyle products suffered a 36% drop in revenue, with the firearms segment seeing even larger declines in order volume in both the wholesale and retail channels. Profit was down more than 80% from year-ago levels. American Outdoor's strategy of diversifying into non-firearm outdoor-oriented products paid off, as that segment showed solid gains. Yet the company predicted that it would lose money in the fiscal third quarter, and dramatically lower full-year guidance let investors know that the future could be tough for American Outdoor Brands.

Silver and black handgun on a white table with a target partially visible in the background.

Image source: Smith & Wesson.

Tellurian sells low

Tellurian stock plunged 18% after the natural-gas specialist announced the pricing on a secondary offering of shares. Tellurian said Friday morning that it had increased the size of its offering from 8 million to 10 million shares, and that it received a price of $10 each, yielding gross proceeds of $100 million. With the stock having closed Thursday at nearly $12, today's adjustment simply reflected the impact of additional supplies of shares on the open market. In the long run, Tellurian will need natural gas prices to recover in order to reach its full potential, but long-term projects like its proposed liquefied natural gas terminal could also be big drivers of growth.

National Beverage falls flat

Finally, shares of National Beverage dropped nearly 11%. The maker of Shasta soda and LaCroix sparkling water released its fiscal second-quarter results on Thursday morning, which included 20% higher revenue and a nearly 40% jump in net income. Yet analysts weighed in against the stock on Friday, including calls for slower growth and an underperform rating from analysts at Credit Suisse, as well as a reiterated sell rating on the stock from Maxim. Despite comments from CEO Nick Caporella fighting back against naysayers and asserting that third parties are making efforts to manipulate the stock deliberately, bearish investors believe that National Beverage is unlikely to draw acquisition interest, and slowing growth in LaCroix's sales could pull down the company's overall expansion.

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Stocks Mentioned

Smith & Wesson Brands, Inc. Stock Quote
Smith & Wesson Brands, Inc.
$13.29 (-3.56%) $0.49
National Beverage Corp. Stock Quote
National Beverage Corp.
$48.06 (0.18%) $0.09
Tellurian Inc. Stock Quote
Tellurian Inc.
$3.02 (-0.82%) $0.03

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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