Investors weren't happy with the latest readings on inflation, and their dissatisfaction showed up in the performance of major stock market benchmarks on Friday.
The Nasdaq Composite (NASDAQINDEX: ^IXIC) posted the largest declines, but the S&P 500 (SNPINDEX: ^GSPC) and Dow Jones Industrial Average (DJINDICES: ^DJI) were also down more than 1% as a key price index ticked up from December to January, which meant persistent price increases remain part of the macroeconomic picture.
Index | Daily Percentage Change | Daily Point Change |
|---|---|---|
Dow | (1.02%) | (337) |
S&P 500 | (1.05%) | (42) |
Nasdaq | (1.69%) | (195) |
Data source: Yahoo! Finance.
Even on a tough day on Wall Street, though, some stocks posted big advances. For Range Resources (NYSE: RRC), speculation about potential consolidation in the energy industry fueled a big gain. Meanwhile, Beyond Meat (NASDAQ: BYND) reported financial results that suggested that it might be ready to recover from a difficult period in its history.
Is Pioneer a buyer for Range Resources?
Shares of Range Resources jumped 12% on Friday. The natural gas exploration and production company was the subject of reports that it might be an acquisition target as energy companies seek to become more efficient given plunging prices of natural gas and relative weakness in crude oil markets as well.
Pioneer Natural Resources (NYSE: PXD) might be looking to buy Range Resources, according to reports from Bloomberg. Investors are speculating that Pioneer's motivation could be to expand its exposure to natural gas at an opportune time, given the recent plunge in gas prices during what has been an unusually warm winter in North America.
Pioneer already has some exposure to natural gas, but largely through its Permian Basin assets in the Southwest, which primarily produce oil. By contrast, Range Resources is heavily invested in the Marcellus Shale, a formation with heavy concentrations of natural gas reserves that stretches along the Appalachian Mountains from New York to Virginia.
Many energy investors have thought that the weaker pricing environment in oil and natural gas made now a good time to look at oil stocks. Pioneer might have the same idea, and with its history of making strategic acquisitions to bolster its competitive position, it's not unreasonable to think that it might follow up on the moves it's reportedly considering.
Beyond Meat looks tasty -- for now
Elsewhere, shares of Beyond Meat rose 10%. The maker of plant-based meat alternatives reported fourth-quarter financial results that weren't especially good but gave shareholders some hope that better times might be ahead.
The latest numbers from Beyond Meat weren't pretty. Revenue in the fourth quarter dropped 21% year over year to $80 million. Net losses ballooned to $67 million, or $1.05 per share. That closed a year in which sales dropped 10% from 2021 levels and the company lost $5.75 per share. Beyond Meat cited drops in both total volume of product sales and average prices, given promotional activity and price reductions in the U.S. and European Union. In particular, the food-service channel saw sales plunge 30% as a large restaurant customer chose not to sustain year-earlier purchase levels.
Yet Beyond Meat is hopeful that it can do better in 2023. The company is projecting full-year sales of $375 million to $415 million, which would be down 1% to 10% from 2022's final figures. Yet it expects margins to improve throughout the year, and it believes it can post positive cash flow by the second half of 2023.
The launch of new products like plant-based steak and chicken nugget alternatives could get attention from consumers. Still, it'll take staying power for those products to convince investors that Beyond Meat is back for good.
10 stocks we like better than Range Resources
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Range Resources wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of February 8, 2023
Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Beyond Meat. The Motley Fool recommends Pioneer Natural Resources. The Motley Fool has a disclosure policy.
