Wall Street tried to mount a modest recovery to start the day on Wednesday, but more pessimistic views on what the immediate future could bring in terms of armed conflict in Ukraine and macroeconomic pressures across the globe ended up prevailing by midday. As of 11:30 a.m. ET, the Dow Jones Industrial Average (^DJI -0.11%) was down 95 points to 33,502. The S&P 500 (^GSPC 0.02%) dropped 22 points to 4,282, and the Nasdaq Composite (^IXIC 0.10%) fell 116 points to 13,265.
At an individual stock level, though, there was considerable disparity between the winners and the losers on the day. Investors are increasingly looking at traditional value plays in industries that have largely fallen off the radar, with an eye toward capitalizing on factors that could enhance their financial prospects in the years to come. Meanwhile, high-growth technology stocks remained under pressure, even when their underlying businesses continued to look sound. Below, we'll look more closely at how Tenneco (TEN) and Monday.com (MNDY 1.33%) fared and how they're indicating continued tension within the stock market.
Image source: Getty Images.
Tenneco gets an offer it can't refuse
Shares of Tenneco jumped 94% in late-morning trading on Wall Street. The maker of automotive parts reported its latest financial results, but it also said that it would agree to an acquisition that will make it a privately held company once again.
Tenneco has entered into an agreement for various fund affiliates of Apollo Global Management (APO -0.92%) to acquire it. The deal puts a value of $7.1 billion on Tenneco, with shareholders slated to receive $20 per share in cash. That's double where Tenneco's stock closed on Tuesday, although it's still less than a third of where the shares traded in their heyday in the mid-2010s.
Tenneco CEO Brian Kesseler argued that the move will better allow his company to take advantage of accelerating advances in mobility technology. Already, Tenneco's solutions aim to make vehicles cleaner, more efficient, and more reliable. With the rise in innovation surrounding electric vehicles, autonomous driving, and even vertical takeoff and landing aircraft, Tenneco sees itself benefiting from the access to capital that Apollo can provide.
A big payday is never a bad thing for shareholders. But with some seeing Tenneco's earnings climbing from around $2 per share in 2021 to more than $4.50 per share in 2022, a buyout at $20 per share could well end up looking like the bargain of a lifetime for Apollo.
This company has the Monday blues
On the other side of the coin, shares of Monday.com fell 22% at midday. The move lower came despite impressive growth from the workplace integration platform provider in its fourth-quarter financial report.
It's hard to find much to fault in Monday's latest numbers. Revenue of $95.5 million was up 91% year over year. Adjusted losses narrowed by more than half from year-ago levels, weighing in at $0.26 per share. Monday's full-year figures showed very similar progress throughout 2021. Net dollar retention rates for the company were above 120%, including rates above 135% for customers with more than 10 users of the system.
Demand for Monday's platform was stronger than ever. Paid customer counts jumped by more than 38,000 to exceed 152,000. The company more than tripled its high-paying customer count, boasting nearly 800 clients producing at least $50,000 in annual recurring revenue.
Yet in the latest sign of high expectations, Monday's revenue growth projections of 53% to 54% for 2022 didn't prove ambitious enough to satisfy growth stock investors. That's been a constant theme in the stock market lately, but for long-term investors, it might offer an opportunity to seek out high-quality businesses that are no longer seeing their share prices pushed into the stratosphere.
