Why Are These Four Stocks Plunging On Thursday?

KLX Inc (NASDAQ:KLXI) shares lost 14% in afternoon trading after the company announced it will take a non-cash, post-tax asset impairment charge of $435 million due to weakness in the company’s oil services division. Because crude prices have more than halved in the past 18 months, E&P companies are spending less in capital expenditures. The lower capital expenditures are negatively affecting KLX’s energy services division’s pricing and volumes. Given the impairment charge is a non-cash expense and KLX’s forward P/E of under 14, the market could be over-reacting on this one, however. Many investors believe crude prices will bounce back as low crude prices cure low crude prices. Seth Klarman’s Baupost Group owned 1.5 million shares at the end of June.

In other news, shares of MAXIMUS, Inc. (NYSE:MMS), a leading provider of government services, are off by 20.5% after the company reported mixed earnings. For the fourth quarter of fiscal 2015, MAXIMUS reported earnings of $0.53 per share on revenues of $578.68 million, versus analyst expectations of $0.52 per share on revenues of over $590 million. The EPS guidance is a bit lower than expected, with the management anticipating GAAP diluted EPS of between $2.40 and $2.70 for 2016 versus the previous guidance of  $2.85-$3.05. The company still expects between $2.4 billion to $2.5 billion in revenue for fiscal 2016. Hedge funds are ambivalent on MAXIMUS, Inc. (NYSE:MMS). According to our data, nine funds reported stakes worth $190.14 million (representing 4.40% of the float) as of the end of the second quarter.

Disclosure:None