U.S. stocks continued to climb on Friday, building on Thursday's small rise but still ending down for the week due to global trade and tariff concerns.
But several individual companies couldn't keep up. Read on to learn why Under Armour (NYSE: UA) (NYSE: UAA), Telecom Argentina (NYSE: TEO), and Synnex (NYSE: SNX) underperformed the market today.
Image source: Getty Images.
Has Under Armour climbed too high?
Shares of Under Armour declined more than 3% despite a lack of company-specific news. Rather, the fall appears to stem from a combination of both Under Armour's recent meteoric rise, and competitor Nike's own positive quarterly report.
Nike is soaring today after crushing expectations with the help of an earlier-than-expected return to growth in North America, where sales had previously slowed on multiple sporting goods retailer bankruptcies in late 2016 and early 2017. Normally it would stand to reason that this development would be good for Under Armour, whose stock got hammered last year given the company's overwhelming reliance on stateside sales. However, some on Wall Street may be assuming that Nike's success is coming at the expense of Under Armour.
Add to that the fact that Under Armour stock has already more than doubled from its 52-week low set last November, and it's no surprise that some investors might be tempted to take their profits off the table today.
Telecom Argentina is at the mercy of its market
Telecom Argentina stock fell 9.4%, again without any company-specific news to merit the fall. In this case, however, the decline follows a steep drop in the broader Argentine stock market. The MERVAL -- the largest index of the Buenos Aires Stock Exchange -- has plunged nearly 13% this week, including a nearly 3% decline on Friday alone.
Investors in U.S.-listed Argentine stocks are particularly worried over the economic impact of global trade tensions on emerging markets, the fallout of the country's currency crisis in April and May, and the repercussions of a $50 billion standby loan from the International Monetary Fund, which spurred national protests earlier this month.
Synnex's big buy
Finally, shares of Synnex fell 9.6%. The IT supply chain services company announced yesterday it has agreed to acquire call center operator Convergys Corp. (NYSE: CVG).
Synnex's Concentrix division will buy Convergys for a combination of $13.25 per share in cash and 0.1193 Synnex shares for each share of Convergys owned. That equates to a purchase price of roughly $2.43 billion, or $26.50 per share.
"This transaction is expected to enhance our earning potential while continuing our strategy of investing in high value services," added Synnex CEO Dennis Polk. "Following this acquisition, we expect to have a solid leadership position in Technology Solutions and Concentrix businesses, with a more balanced adjusted EBITDA contribution."
So why the decline? For one, this deal is a big pill to swallow considering Synnex's total market cap stands at just $3.9 billion as of this writing. Though it might well serve to create ample shareholder value down the road, investors don't seem fond of the dilution it will incur to get the deal done.
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Steve Symington owns shares of Under Armour (C Shares). The Motley Fool owns shares of and recommends NKE, Under Armour (A Shares), and Under Armour (C Shares). The Motley Fool has a disclosure policy.