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Why CBL & Associates Properties, At Home Group, and Aberdeen Standard Physical Palladium Slumped Today

By Dan Caplinger - Updated Apr 16, 2019 at 9:42AM

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A host of different factors hurt these companies.

Wednesday was a weak day on Wall Street, with most major indexes giving up modest amounts of ground. Investors don't seem very confident about what's likely to happen with the financial markets for the rest of 2019, as the recent drop in interest rates has most economists worried about a possible recession in the near future. The interactions across different corners of the stock market have gotten a lot more complex, with some companies benefiting from the same conditions that others are struggling to overcome. CBL & Associates Properties ( CBL ), At Home Group ( HOME ), and Aberdeen Standard Physical Palladium ( PALL 0.49% ) were among the worst performers. Here's why they did so poorly.

Settlement costs smack CBL's dividend

Shares of CBL & Associates Properties plunged 25% after the real estate investment trust said that it would pay $90 million to settle a class action lawsuit. Mall tenants had alleged that CBL had overcharged them for electricity, and the real estate investment trust decided it was prudent to settle rather than going to trial. Yet the settlement payment will require CBL to suspend its dividends at least for 2019, and even beyond that, extensive debt will pose challenges for the real estate company well into the future. As mall operators try to reinvent themselves in light of the demise of many high-profile department store anchor tenants, CBL has to overcome several obstacles at the same time in order to succeed.

At Home retail store location, viewed from front in an empty parking lot.

Image source: At Home Group.

At Home deals with disappointment

At Home Group's stock fell 20% following the release of the home decor specialist's fourth-quarter financial report. Revenue for the quarter rose 21% from the year-earlier period, but comparable-store sales were up just 2.1%. Moreover, even a 38% rise in adjusted pro forma earnings per share wasn't enough to satisfy growth-hungry investors. Instead, most of those following At Home Group paid the most attention to its tepid forecast for the current quarter, with a late Easter holiday and poor weather likely to put a damper on early spring season shopping. The stock's move shows how important profitability is becoming even in high-growth areas of the market.

Check out the latest earnings call transcripts for CBL & Associates Properties, At Home Group, and other companies we cover.

Palladium takes a dive

Finally, shares of Aberdeen Standard Physical Palladium dropped 7%. As its name suggests, this exchange-traded investment vehicle is backed by physical palladium bullion, and until today's decline, the fund had been among the top performers so far in 2019, having risen more than 25% year to date. Yet today's reversal lopped off almost half of those gains, as precious metals investors sent palladium prices down more than $100 per ounce to the low $1,400s. After such a big move higher, Aberdeen's pullback today was understandable, but it wasn't any easier for shareholders to stomach.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

At Home Group Inc. Stock Quote
At Home Group Inc.
Aberdeen Standard Palladium ETF Trust - Aberdeen Standard Physical Palladium Shares ETF Stock Quote
Aberdeen Standard Palladium ETF Trust - Aberdeen Standard Physical Palladium Shares ETF
$172.86 (0.49%) $0.84
CBL & Associates Properties, Inc Stock Quote
CBL & Associates Properties, Inc

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