Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
Stock markets in the U.S. once again climbed to record highs, as investor enthusiasm coming into the key holiday period continued to drive demand for equity investments. Yet, even with the market climbing substantially today, The Fresh Market (TFM), Lumber Liquidators (LL), and Nordic American Tankers (NAT 1.85%) all posted substantial losses. Let's put these stocks under the microscope to see why they fell so much today.
The Fresh Market plunged 19% after reporting disappointing earnings in its third-quarter release last night. The company once again underperformed on the same-store sales front, posting just 3.1% gains for the quarter. Expansion opportunities haven't gone as well as the grocery retailer had hoped, with new stores in the Houston area facing some difficulty in gaining traction, given lack of familiarity with the Fresh Market brand name deep in the heart of rival Whole Foods' home territory. Given the company's poor guidance for the full fiscal year, and near-flat net income from year-ago levels, Fresh Market didn't do its high-growth reputation any favors today.
Lumber Liquidators got cut by 12% as hedge fund investor Whitney Tilson targeted the company as a short candidate at an investor conference this morning. Tilson highlighted the fact that the stock has soared lately, but he expressed concerns about whether the hardwood-flooring specialist might be obtaining raw materials for its flooring from questionable sources. Given Tilson's reputation, traders sold first and will ask questions later, but it's unclear to what extent long-term investors should be concerned about Tilson's call.
Nordic American Tankers sank almost 10% as the company announced the pricing of its secondary offering of more than 8.1 million shares this morning. The company just announced the offering last night, and the $8 offering price happens to match exactly where the stock closed after today's plunge. With some analysts pointing to improving conditions in the shipping sector, investors should hope that Nordic American's offering could be the last time it will need to raise capital under less-than-ideal conditions.
