Hot Stocks: Natural gas stocks surge; TLRY extends rally; KMX, CRMT hit lows; HNST plunges

The major U.S. equity averages finished Friday’s trading mixed, with the Nasdaq posting a slim loss while the Dow and S&P 500 recorded modest gains. The uncertainty came as Treasury yields surged, with investors considering the prospects of accelerated interest rate hikes from the Federal Reserve.

News out of Europe remained in focus as well, with natural gas taking center stage. Stocks in the sector jumped after the U.S. and European allies announced a deal for the U.S. to export gas to the continent.

Stocks like Tellurian (NYSE:TELL), Southwestern Energy (SWN), EQT (EQT) and Range Resources (RRC) all showed substantial gains on the news.

The impact of Russia’s invasion of Ukraine, which has spurred concern about natural gas supplies in Europe, has also raised the specter of food shortages. Amid this supply crunch in the sector, agribusiness service provider The Andersons (ANDE) saw another day of gains, climbing to a new 52-week high.

Cannabis stocks continued to show strength as well. Tilray (TLRY) posted another gain of more than 20% amid ongoing hope that the U.S. would legalize marijuana.

Looking at some of the day’s standout decliners, Honest Company (HNST) plunged more than 20% following the release of its quarterly results. On the news, shares of the Jessica Alba-founded company reached their lowest level since coming public.

A couple of used car dealers also retreated to new lows. Worries about industry dynamics weighed on shares of CarMax (KMX) and America’s Car-Mart (CRMT).

Sector In Focus

Natural gas stocks were among the best performers Friday as U.S. President Joe Biden announced a deal with European allies to increase U.S. natural gas exports to Europe. The agreement is seen as a step towards LNG export terminal approvals.

On the back of this development, shares in the sector saw significant buying interest. Tellurian (TELL) was among the standout performers in the sector, rising by more than 20%.

Meanwhile, Southwestern Energy (SWN) climbed almost 16% on the day. EQT (EQT) advanced about 12%, while Range Resources (RRC) climbed 8%.

Standout Gainer

Tilray (TLRY) recorded yet another substantial gain, adding to the upswing it has seen in recent days amid hope that the U.S. would legalize marijuana on the national level.

As part of a general rise in the overall sector, the stock jumped another 23% during the session. Specifically, TLRY rose $1.59 to close at $8.56.

Friday’s rally added to a 22% jump seen during the previous session. The advance also marked its eighth gain in the past nine sessions. The stock has climbed about 75% since March 14.

Cannabis stocks have surged in recent days amid news that the U.S. House of Representatives will consider a bill to legalize marijuana. The legislation is currently slated to come before the House next week.

Standout Loser

The release of quarterly results sparked selling in the Jessica Alba-founded Honest Company (HNST). The stock plunged 23%.

The consumer and beauty products company reported a quarterly loss that was wider than analysts had predicted. Revenue also fell short of expectations, rising just 3% from last year to reach $80.4M.

HNST predicted a revenue slide in the current quarter. The firm said Q1 revenue would decline 15% to $68.9M, compared to an analyst estimate of $91.4M.

Weighed down by the weak results and guidance, HNST dropped $1.36 to finish at $4.68. The slide reversed gains posted in the weeks headed into the earnings report. Shares reached a low of $4.20 during the day — its lowest mark since coming public last May.

HNST priced its IPO at $16, meaning it has lost about 71% of its value since that debut amount.

Notable New High

Russia’s invasion of Ukraine has played havoc on commodity markets. Energy has garnered most of the headlines, amid high prices for oil and natural gas. However, agricultural commodities have also jumped, as supply constraints lead to worries about shortages.

While the humanitarian implications loom over any discussions of the crisis, The Andersons (ANDE), a provider of products and services to the agricultural sector, has seen a dramatic upswing in its stock price in response to current market dynamics. This continued on Friday, with shares gaining another 7% and reaching a fresh 52-week high.

ANDE has several business segments, providing such services as grain storage and commodity risk management. Shares have risen sharply since just before the Russian invasion, when the stock sat below $40. On Friday, shares gained $3.43 to close at $55.21.

During the session, ANDE also reached an intraday 52-week high of $55.38. The stock has risen 44% since mid-February.

Notable New Low

Shares of used car dealers CarMax (KMX) and America’s Car-Mart (CRMT) set new 52-week highs on Friday, adding to recent weakness amid concerns about overall dynamics in the industry.

The sector received a boost in 2021 amid high used car prices. However, stocks have suffered in the past several months amid worries that consumers would balk at the increased expense, cutting into volume.

America’s Car-Mart (CRMT) has fared worse than its peer, recording its sixth decline in the last seven sessions. The stock ended Friday at $83.60, a decline of nearly 3% on the day. The stock also set an intraday 52-week low of $83.32.

CarMax (KMX) lost about 2% on Friday, ending the day at $97.27. The stock also established an intraday 52-week low of $95.89.

Looking longer-term, KMX reached a high of $155.98 in November but has lost ground since then. Shares have retreated 38% from that peak.

CRMT showed signs of weakness much earlier. The stock posted a sharp drop last August amid the release of its quarterly update and has seen intermittent selling pressure since. The stock has lost about 49% of its value since mid-August.

For more of Wall Street’s best- and worst-performing stocks, click over to Seeking Alpha’s On The Move section.


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