Why AngloGold Ashanti, Mid-America Apartment Communities, and Endo International Slumped Today

By Markets Fool.com


AngloGold's Ghana site. Image source: AngloGold Ashanti.

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The stock market continued to move into record territory on Monday, as investors seemed content to take various moves from central banks across the globe as a positive for stocks overall. Just about every major central bank except the Federal Reserve has been as accommodative as possible with their monetary policy efforts, seeking to stimulate economic activity in a tough overall environment. Rising oil prices also helped bolster the energy sector, and major market benchmarks ended the day with gains of between a quarter and a third of a percentage point. However, not every stock joined in the rally, and AngloGold Ashanti (NYSE: AU), Mid-America Apartment Communities (NYSE: MAA), and Endo International (NASDAQ: ENDP) were among those stocks that missed out on gains Monday.

AngloGold can't glitter

AngloGold Ashanti fell 5% despite posting solid financial results. The gold miner said its cash flow tripled to more than $100 million during the first half of 2016, allowing the company to reduce its net debt by nearly a third and post adjusted earnings that were more than 150% higher than in the year-ago period. AngloGold held its predictions for production this year unchanged at 3.6 million to 3.8 million ounces, but the company has an extremely attractive cost structure that puts its cash production costs at about $700 per ounce. That has given AngloGold an edge over higher-cost competitors during tough conditions for the gold market, but many investors are concerned that safety-related problems could cause the miner to miss its production-growth targets. Even with the decline, AngloGold shares have tripled so far in 2016, and that has helped hard-hit investors make back some of their losses from recent years.

Mid-America makes a big buy

Mid-America Apartment Communities dropped 5% after announcing that it would make a major acquisition. The residential real estate investment trust said it would buy Post Properties in an all-stock deal worth $3.88 billion. Under the deal, Post shareholders will receive 71 shares of Mid-America stock for every 100 shares of Post they own. The companies expect the deal to close before year-end, and Mid-America CEO Eric Bolton noted that the merger should "establish the leading apartment real estate platform focused on the high-growth Sunbelt region of the country." Following the completion of the merger, legacy Mid-America shareholders will own more than two-thirds of the company, but Post will have three directors out of the new 13-member board for the post-merger entity. The move is just the latest round of consolidation in the real estate market, which has seen M&A activity increase lately.

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Endo gives back its gains

Finally, Endo International declined 4%. The drop gave back much of the ground the stock gained on Friday, with those gains coming in the wake of an announcement that the drugmaker would withdraw its supplemental new drug application relating to specific abuse deterrent labeling for its Opana anti-opioid treatment. Analysts at Mizuho had upgraded the stock on Friday, noting that growth in the generic drug industry could help propel the company's share price higher. Yet the company said it could choose to gather more information with the intent of refiling later, and investors seemed to prefer that strategy to the more uncertain path of going forward now.

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