Why JA Solar, SandRidge Energy, and Ballard Power Systems Slumped Today
Wednesday was tough for the stock market, as major benchmarks once again pulled back, extending a losing streak. A triple-digit loss for the Dow Jones Industrial Average and similar-sized declines on a percentage basis for other popular indexes reflected the growing uncertainty about the sustainability of the bull market, which is looking to finish its ninth year of nearly straight-up movement. General issues like political strife and economic policy challenges weighed on sentiment, but some company-specific problems also hit certain individual stocks hard. JA Solar (NASDAQ: JASO), SandRidge Energy (NYSE: SD), and Ballard Power Systems (NASDAQ: BLDP) were among the worst performers on the day. Below, we'll look more closely at these stocks to tell you why they did so poorly.
JA Solar gets stuck in the shade
Shares of JA Solar plunged 13% after the solar panel manufacturer reported poor quarterly financial results. Revenue climbed 4% on a more-than-30% jump in external shipments of solar modules and cells, but the company saw margin levels fall, sending net income down from year-earlier levels. More troubling was the fact that the period provided a favorable environment for the solar industry, as demand for panels has been relatively high, supporting strong pricing practices among suppliers. With those favorable conditions potentially coming to an end in 2018, JA Solar could face even more trouble in the near future.
Image source: JA Solar.
SandRidge makes a deal
SandRidge Energy stock gave up 13% in the wake of the company's announcement of an acquisition. The oil and gas producer said that it would spend $746 million in order to purchase Bonanza Creek Energy (NYSE: BCEI), with a mixed cash and stock offer totaling $36 per share. The move will enhance SandRidge's exposure to key shale areas in Colorado, but investors who were burned in SandRidge's prior bankruptcy proceeding see some troubling similarities in the way that it's seeking to grow now through acquisitions. Smart strategic moves can add value, but without clearer benefits from the particular deal, SandRidge investors appear to want more proof before they'll buy into the logic underlying the buyout offer.
Ballard looks less energetic
Finally, shares of Ballard Power Systems finished down 6.5%. The fuel-cell specialist has been working hard to make strategic moves to enhance its technological innovation, including an agreement earlier this week with Siemens to develop a zero-emission fuel cell for Siemens' Mireo light rail train system. The $9 million deal isn't huge, but Ballard CEO Randy MacEwen believes that it could help prove "the overall value proposition offered by Ballard's fuel cell technology in a demanding use case and duty cycle." Yet with investors already having high hopes for Ballard's immediate future, it will only get harder for the fuel-cell specialist to keep up and surpass those expectations in the coming months and years.
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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
