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Why Constellation Brands, SMART Global Holdings, and Greenbrier Slumped Today

Dan Caplinger, The Motley Fool

Wednesday was a good day on Wall Street, and positive momentum from earlier in the week continued to lift most stock market benchmarks. The Dow Jones Industrial Average picked up almost 100 points as investors seemed more comfortable with the likely course of interest rates and a potential resolution to trade disputes between the U.S. and China. Yet some individual stocks suffered from bad news that made them miss out on the broader market's advances. Constellation Brands (NYSE: STZ), SMART Global Holdings (NASDAQ: SGH), and Greenbrier (NYSE: GBX) were among the worst performers. Here's why they did so poorly.

Constellation loses its shine

Shares of Constellation Brands fell 12% after the company famous for Corona beer, Robert Mondavi wine, and Svedka vodka reported its fiscal third-quarter results. The company said revenue climbed 9%, producing an 18% boost in adjusted earnings per share. But investors were disappointed with the downward pressure that resulted from weak wine and spirits performance, as well as poor results from Constellation's investment in cannabis specialist Canopy Growth. Constellation also cut its outlook for the full year, calling into question its overall strategy. Interestingly, though, Canopy shares jumped, indicating that at least among marijuana stock investors, long-term confidence in the industry remains high.

Five beverages lined up in a row, with some in boxes and others in bottles or glasses.

Image source: Constellation Brands.

SMART Global doesn't look so smart

SMART Global Holdings saw its stock plunge 25% in the wake of its fiscal first-quarter financial report. The electronics company specializing in memory and storage solutions said that both net income and total revenue were higher by close to 50% compared to year-earlier numbers, and CEO Ajay Shah pointed to success in memory, computing, and storage solutions as driving the overall results. Yet despite optimism about its future, SMART Global's outlook for the fiscal second quarter wasn't as favorable as investors had hoped. With electronics companies seeing extreme volatility lately, it'll be up to SMART Global to prove that its particular angle on the tech industry can keep producing solid growth.

Greenbrier goes off the rails

Finally, shares of Greenbrier dropped 8%. The rail car maker said that sales were higher by 8% compared to the year-earlier quarter, but net income fell by more than 30% over the same period. Challenges related to delivery volume, mix of rail cars sold, and a higher effective tax rate all weighed on Greenbrier's bottom line, and investors weren't happy with expectations for the remainder of fiscal 2019. Given Greenbrier's sensitivity to the health of the energy industry, the rail car maker needs a crude oil rebound in order to drive tank-car sales and pull out of a tailspin that's lopped a third of its value off its share price.

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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool recommends Constellation Brands. The Motley Fool has a disclosure policy.