Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Why Urban Outfitters, Berry Petroleum, and McEwen Mining Slumped Today

By Dan Caplinger - Nov 20, 2019 at 4:32PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Find out why these stocks lost more than the broader market.

Major benchmarks gave up ground on Wednesday, reacting negatively to new concerns about delays in the U.S. and China reaching a tentative trade deal. Investors have been counting on an agreement that would make at least some progress in the long dispute between the two countries, but those following the situation seem to be reining in their optimism. Adding to the downbeat mood on Wall Street was some company-specific news that sent some stocks sharply lower. Urban Outfitters ( URBN 2.34% ), Berry Petroleum ( BRY 3.90% ), and McEwen Mining ( MUX 0.95% ) were among the worst performers. Here's why they did so poorly.

Urban Outfitters copes with a retail slump

Shares of Urban Outfitters dropped 15%, succumbing to the same adverse trends that have plagued many of its industry peers. The avant garde retailer managed to see modest revenue growth in the third quarter compared to year-earlier figures, but its physical store locations posted declines in comparable-store sales. Urban Outfitters has been able to sustain overall growth by emphasizing its digital channel. But shareholders are now concerned about fairly high levels of inventory that could necessitate significant markdowns during the key holiday season. Combine that with tariff pressures and worries about the health of the U.S. consumer, and it's not surprising to see Urban Outfitters' shares losing some ground.

Front of Urban Outfitters location as seen from across a street at dusk.

Image source: Urban Outfitters.

California deals Berry a blow

Berry Petroleum saw its stock sink 20% after investors reacted to new California regulations that will potentially curtail some oil drilling operations in the state. Stock analysts at multiple companies downgraded Berry on fears that a moratorium on new permits for high-pressure steam injection wells could lead to production declines for the oil and gas producer in the long run. Berry said that the regulations won't affect its 2019 results, but it did say that the move might have a potential impact on future thermal diatomite wells. The company seems confident in its ability to pivot, but shareholders don't appear to have the same enthusiasm.

McEwen sells some stock

Finally, shares of McEwen Mining fell nearly 15%. The mining company said that it had completed pricing of a public offering of stock and warrants, selling 37.75 million units for $1.325 per share. That might seem like a good deal given that McEwen's stock closed above $1.50 Tuesday night, but the units include not only a share of McEwen stock, but also half of a warrant to purchase additional shares at $1.7225 per share. Given that the stock had traded above $2 as recently as September, McEwen's timing seems to be bad, and all the new shares will weigh on any rebound that the mining company is able to mount in the months to come.

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Urban Outfitters, Inc. Stock Quote
Urban Outfitters, Inc.
$32.34 (2.34%) $0.74
McEwen Mining Inc. Stock Quote
McEwen Mining Inc.
$0.94 (0.95%) $0.01
Berry Petroleum Corporation Stock Quote
Berry Petroleum Corporation
$8.13 (3.90%) $0.30

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/06/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.