Please ensure Javascript is enabled for purposes of website accessibility

Why BofI Holding, Western Digital, and Agrium Slumped Today

By Dan Caplinger - Apr 14, 2016 at 6:33PM

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

On a flat day for the markets, these stocks fell. Find out why.


Image: Western Digital.

Thursday was largely a day of rest for the stock market, and investors seemed content to consolidate their gains from earlier in the week. Earnings season continued to focus on the financial sector, which has performed better than many had feared, yet still without the rapid pace of growth that most investors would prefer to see.

Major market benchmarks all finished within a tenth of a percentage point of unchanged on the day, but there were still some stocks that made significant moves today. Among them on the downside were BofI Holding (AX -0.09%), Western Digital (WDC -2.07%), and Agrium (NYSE: AGU).

BofI Holding plunged 16% as the Internet-centered bank faces a class-action lawsuit making allegations of unlawful lending practices, ineffective internal controls, materially inadequate audit practices, and failures to disclose related-party transactions adequately. The 142-page filing details a wide swath of questionable behavior, including alleged deficiencies in its customer-identification system that resulted in missing or unverifiable tax identification numbers, as well as loans to foreign nationals.

The news put a halt to the rebound that the Internet bank company had seen during the past couple of months. Even though the stock is down about 45% from its highs just last fall, many fear that BofI Holding could see further losses in the future.

Western Digital was down 7% in the wake of bad news for fellow hard-drive specialist Seagate Technology. Seagate issued an early warning in advance of its fiscal third-quarter financial results, saying that its preliminary earnings figures would fall short of what it had predicted in previous guidance because of weak demand for disk-drive products in PCs and servers.

Western Digital's losses weren't as extreme as those of its rival, but the news also raises concerns about whether Western Digital will face the same general business conditions in its sales efforts. Both companies are expected to issue their official quarterly results in about two weeks, at which point it should be evident whether Western Digital managed to avoid Seagate's fate.

Finally, Agrium finished the day down 6%. The fertilizer company suffered a downgrade from analysts at Scotiabank, which pointed to falling prices for nitrogen-based fertilizers and continuing pressure on the agricultural markets. Other companies in the fertilizer business also got negative attention from various analysts Thursday, and unfortunately, early signs point to little or no support from crop prices for the coming growing season. Until supply and demand dynamics start to come back into balance, Agrium and its peers will likely remain in difficult situations, and pricing could well take further hits before the industry reaches a new equilibrium.

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

Western Digital Corporation Stock Quote
Western Digital Corporation
WDC
$56.81 (-2.07%) $-1.20
Axos Financial, Inc. Stock Quote
Axos Financial, Inc.
AX
$35.29 (-0.09%) $0.03

*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
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

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.