The 5 Biggest Flops from Last Week’s Market, including Commerzbank, RWE, and E.ON
Last week, the DAX climbed a respectable, if fairly mundane, 1.3%, and economic news was mostly positive. But these five stocks sure didn’t benefit. Here’s the week’s biggest flops:
It seems like energy company RWE AG (ETR:RWE) (FRA:RWE) just can’t win lately. It’s been trying for a year to sell its oil and gas production unit to Russian billionaire Mikhail Fridman, but concerns about Russia’s role in the Ukraine crisis delayed the sale. Now, with the 5.1 billion euro sale finalized last week, the UK is raising objections to the North Sea gas licenses that are part of the deal. On Wednesday, the UK gave Fridman seven days to explain why he should be allowed to retain ownership of the gas fields. If he can’t answer to the UK’s satisfaction, the country is considering forcing him to sell them. RWE’s shares were down 2.8% for the week, the worst performer of the DAX.
RWE’s fellow energy company E.ON AG (ETR:EOAN) (FRA:EOAN) had almost as bad a week, down 2.7%. Ironically, the companies were two of the DAX’s best performers last week after the unveiling of a plan to create a European Energy Union. However, on Friday, E.ON announced that the future of its Irsching gas-fired power plant was in doubt due to an ongoing crisis in the power sector. Many of the company’s plants are now operating at a loss.
Meanwhile, Commerzbank AG (ETR:CBK) (FRA:CBK) should be thankful for the energy industry’s woes, because if it weren’t for them, it would have been the worst DAX performer last week, with shares down 1.6%. Reuters reported that the bank, Germany’s second-largest lender, is expected to pay U.S. authorities more than $1.4 billion to settle allegations it violated U.S. sanctions. The settlement would also resolve a separate investigation stemming from the Olympus Corp accounting scandal. A spokesperson for the bank had no comment when approached by Reuters.
Vehicle parts manufacturer ElringKlinger AG (ETR:ZIL2) (FRA:ZIL2) had the biggest one-day drop of any HDAX stock last week. Shares were down nearly 5.2% last Monday, after the company reported strong 2014 numbers, including organic revenue growth of 11.2%. However, its outlook for 2015 was much more conservative: 5% to 7% organic revenue growth, which may have accounted for the fall in share price.
And speaking of dropping on strong numbers, Germany’s largest publicly-traded homeowner Deutsche Annington Immobilien SE (ETR:ANN) (FRA:ANN) saw its shares drop more than 8% for the week after reporting strong 2014 earnings, increasing their dividend, and reconfirming their 2015 guidance. I really didn’t see anything to warrant such a sharp decline in share price, unless investors are concerned about a possible upcoming capital increase to help the company finish its recent acquisition of Gagfah. Certainly, with housing markets booming in many large German cities due to lack of new construction and low vacancy rates, this may represent a buying opportunity.
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John Bromels has no positions in any of the stocks mentioned. The Motley Fool does not own any of the stocks mentioned.
Last week, the DAX climbed a respectable, if fairly mundane, 1.3%, and economic news was mostly positive. But these five stocks sure didn?t benefit. Here?s the week?s biggest flops:
It seems like energy company RWE AG (ETR:RWE) (FRA:RWE) just can?t win lately. It?s been trying for a year to sell its oil and gas production unit to Russian billionaire Mikhail Fridman, but concerns about Russia?s role in the Ukraine crisis delayed the sale. Now, with the 5.1 billion euro sale finalized last week, the UK is raising objections to the North Sea gas licenses that are part of the deal….