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Why Cabot Oil & Gas, Uxin, and Scholar Rock Holding Slumped Today

By Dan Caplinger – Dec 28, 2018 at 4:32PM

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Several stocks simply lost momentum from past successes.

Friday was a mixed day on Wall Street, with major stock indexes moving violently in both directions before finishing slightly below where they started the session. In the absence of major news, investors seemed content with letting the market drift, with bullish and bearish traders taking turns pushing the market up and down at various points during the day. Yet a few companies saw their shares post substantial declines. Cabot Oil & Gas (CTRA 2.08%), Uxin (UXIN -2.18%), and Scholar Rock Holding (SRRK 4.58%) were among the worst performers. Here's why they did so poorly.

Cabot leads the S&P 500's losers

Shares of Cabot Oil & Gas finished with a 3.5% drop, the worst among stocks in the S&P 500 index. The move came despite a 1.5% rise in crude oil prices, which closed above the $45-per-barrel level. Natural gas has played a much more critical role in driving Cabot's growth, and natural gas futures fell roughly 5% to 6% due to mild weather in the key Northeast region and signs of supply-and-demand imbalances. Until the energy markets find ways to help natural gas producers realize more value from their production, stocks like Cabot will remain under pressure.

Drilling rig with lights near sunset.

Image source: Cabot Oil & Gas.

Uxin takes an ugly turn

Chinese used-car seller Uxin saw its stock turn into a lemon, falling 23%. The company, which has a sophisticated automated car-buying platform that includes online videos of actual vehicles for sale, has seen big ups and downs lately. News earlier this month of a deal with Alibaba to sell cars on its Taobao site led to Uxin shares tripling in just a couple weeks, but now, the stock has lost half its value just since Dec. 19. Shareholders need to prepare for a bumpy ride, because Uxin is likely to remain volatile as investors look to figure out whether its business model will prove successful in the long run.

Scholar Rock keeps giving back gains

Finally, shares of Scholar Rock Holding declined 10%. The newly public biotech stock had been on a roll lately, hitting an all-time high earlier in December when it announced that it would work with Gilead Sciences on seeking treatments for fibrotic diseases, including non-alcoholic steatohepatitis and diabetic kidney disease. Yet despite the possibility of receiving as much as $1.5 billion in total payments if the collaboration achieves key milestones, Scholar Rock shareholders seem to realize that the company will have to overcome substantial competition in the NASH and kidney disease space in order to be ultimately successful.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends GILD. The Motley Fool recommends Uxin Ltd. The Motley Fool has a disclosure policy.

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