Two stocks that started the day poorly and are still down in afternoon trading are Terex Corporation (NYSE:TEX) and Verizon Communications Inc. (NYSE:VZ). The former is down by more than 2.3%, while the latter has dipped by over 1.4%. Both stocks have rebounded slightly throughout the day from deeper morning losses. The sting in Verizon’s stock price was pricked by its CEO Lowell McAdam at an investor conference when he disclosed that the revenues for the next fiscal year will not significantly change from this year’s numbers. Terex on the other hand slid after JPMorgan Chase & Co. (NYSE:JPM) downgraded the stock to ‘Underweight’ from ‘Neutral’, lowering its price target to $23 from $25 in the process.
The main reason for JP Morgan’s Terex Corporation (NYSE:TEX) downgrade was its merger with Konecranes, which the analysts think is going to create more challenges than synergies. The investment bank’s analysts opined that the culture within the two companies was remarkably different and that this would lead to below-guidance revenues and EBIT following the merger. Both companies are currently engulfed in restructuring activities in order to harmonize their marriage. The stock is currently trading at a forward earnings multiple of 9.2 and is only 0.22% above its 52-week low.
A number of hedge funds reduced their holdings in Terex Corporation (NYSE:TEX) during the second quarter. At the end of June a total of 28 funds had $285.57 million invested in the company compared to 28 firms with $499.30 million in holdings at the end of March. The stock price fell by nearly 13.8% during this period. Among the company’s top ten stockholders in our database are David Shaw’s D E Shaw, which reduced its stake by the most, a 34% cut to 646,500 shares valued at $15.03 million during the April-June quarter. Richard S. Pzena‘s Pzena Investment Management topped the list, holding about 4.0 million shares valued at $92.93 million.
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The JP Morgan analysts had expected Verizon Communications Inc. (NYSE:VZ) to deliver EPS of $3.94 for 2015 and $4.06 for 2016. The $182.83 billion telecommunications company is focused on getting back to its former credit rating, which was cut in 2013 when it signed a merger agreement with Vodafone to the tune of $130 million, which is to be completed by 2019. Another deal that Verizon embarked on recently was when it decided to sell a package of wireline assets to Frontier Communications Corp (NASDAQ:FTR) for $10 billion earlier this year.
Professional money managers we track were bullish towards the company during the second trimester. Even though the stock price dropped by 4% during the quarter, a total of 62 hedge funds held $2.77 billion in the company at the end of June compared to 59 firms with $2.21 billion at the end of March. Legendary investor Warren Buffett‘s Berkshire Hathaway is the largest stockholder of Verizon Communications Inc. (NYSE:VZ) within our database, holding some 15.0 million shares valued at $699.19 million.
Disclosure: None
