Ouch and Ouch

I don't pay much attention to a single day's market action. In fact, I think it's unhealthy to check stock prices of holdings all the time.

Still, I couldn't help but note that two portfolio positions took it on the chin today after reporting results. American Eagle Outfitters (AEO/NYSE) lost more than 17% and USA Mobility (USMO/NASDAQ) lost more than 20%.

American Eagle's loss should be a relatively short-term thing -- it's a retailer in a lousy economy but still immensely popular with 15 to 25 year olds. This is a relatively new holding and I'm not particularly bothered as things stand now.

USA Mobility is a stock I've held longer, and may be more troubling. I quickly scanned a press report that the company is talking about evaluating its strategy for returning cash to shareholders "which may include periodic recurring cash distributions, special cash distributions, a stock repurchase program or a combination of these alternatives." The company's had a decent payout already. This might be a case of the pager business declining more than anticipated.

A commenter to another post pointed out that Fairholme exited USA Mobility some time previously and it looked to be a smart move. True, and right now it is competing with Media General and my two Japanese consumer lenders for the biggest dog in my portfolio. ;-)

Comments

[tom]

i own a little as well. when looking at the press report although there revenues declined the major source of income - medical- seemed to stay stable, and their loss is mainly due to a special tax situation right?

[John]

tom: Are you talking about USMO? The report I scanned didn't say that, or I just missed it. I've been swamped with non-blogging projects and haven't read their release.