Please ensure Javascript is enabled for purposes of website accessibility

Stocks On the Move: Disney Jumps to All-Time High as Newmont, Cabot Disappoint

By Dan Caplinger – Feb 21, 2014 at 12:30PM

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

Newmont Mining and Cabot Oil & Gas were among the weaker performers at midday, while Disney led the Dow higher. Find out why.

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.

The Dow Jones Industrials (^DJI 0.45%) defied negative news on the housing front Friday to rise a modest 28 points as of 12:30 p.m. EST. Disney (DIS -0.01%) was the top performer in the average, with its stock hitting all-time highs. But beyond the Dow 30, Newmont Mining (NEM -0.86%) and Cabot Oil & Gas (CTRA 0.25%) fell after their respective earnings reports, despite having some relatively positive things to say.

In the context of all the adverse weather-related news we've seen lately, Disney's 1.4% advance makes a great deal of sense. Its theme parks are located in good-weather areas that are popular destinations in their own right, and although its studio films rely on box-office proceeds for their initial success, Disney also makes money on that content further down the pipeline. Most importantly, with people staying indoors, Disney's television media properties have the biggest chance to shine, justifying the huge distribution fees that the House of Mouse reaps from cable companies and other distribution vehicles. Disney's relatively weather-proof business gives it an advantage in this long winter season.

Newmont, however, hasn't been as lucky, as its stock fell nearly 6% today even as gold prices remained relatively stable. The gold miner managed to boost production volume substantially in the fourth quarter compared to the year-ago quarter, but the huge decline in prices for gold bullion still led Newmont to report weaker overall revenue (a fall of 12%) than investors had expected. More importantly, plunging prices forced the company to adjust its reserves downward by 11%, with large impairment charges sending Newmont to a generally accepted accounting principles loss even as its adjusted net income fell short of expectations as well. Coming after a 25% dividend cut earlier this week, Newmont shareholders aren't happy with the gold miner's progress.

Cabot Oil & Gas slumped almost 7% even though many investors made favorable comments about the exploration and production company's latest earnings and reserves. At first glance, a 42% increase in proved reserves and new arrangements with a WGL Holdings (WGL) subsidiary to have more of its natural-gas production delivered via pipeline look like positives for Cabot. Yet with investors having extremely high expectations for Cabot, even a near-doubling of profit and a 32% jump in revenue might not have been enough to satisfy shareholders looking to justify what had been a nearly 50% rise in the stock over the past year and an ambitious valuation.

Dan Caplinger owns shares of Walt Disney. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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

Dow Jones Industrial Average (Price Return) Stock Quote
Dow Jones Industrial Average (Price Return)
$34,347.03 (0.45%) $152.97
Walt Disney Stock Quote
Walt Disney
$98.87 (-0.01%) $0.01
Coterra Energy Inc. Stock Quote
Coterra Energy Inc.
$27.61 (0.25%) $0.07
Newmont Corporation Stock Quote
Newmont Corporation
$45.85 (-0.86%) $0.40
WGL Holdings Inc. Stock Quote
WGL Holdings Inc.

*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 analyst team.

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 11/26/2022.

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

Premium Investing Services

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