This is an update of an earlier report.
Every dog has its day, it seems. Shares of some of the most beaten-up stocks of 2015 were up on Monday despite the broader S&P 500 closing down 1.5%.
With little changing over the holiday weekend, the rally in some of these names is likely due to the "January effect," the annual phenomenon in which investors return to market after selling in December to lock in tax losses. Even so, some of Monday's gains require special attention as some moves hint at promise while other moves, specifically in SunEdison and Chesapeake Energry remain baffling.
SunEdison (SUNE): Shares of the Missouri-based renewable energy company closed up 13% on Monday. For comparison, the company was down 70.5% for 2015 and 39% of its shares are shorted. On Wednesday, the company announced plans to extinguish $336 million of its debt by offering creditors shares of its yieldco, TerraForm Power (TERP).
SunEdison's fall from grace began in July as it became clear the company overextended itself after announcing plans to acquire Vivint Solar (VSLR) and it appeared that it used a high interest loan from Goldman Sachs to pay off a loan to Deutsche Bank. Investor confidence was further shaken in the fourth quarter. David Einhorn's Greenlight Capital cut its stake in SunEdison by 25%. Meanwhile, David Tepper's Appaloosa Management announced an activist stake in TerraForm Power after a series of management and board changes in the yieldco suggested SunEdison was exerting undue influence. SunEdison's stock seesawed in the latter portion of 2015 amid negative news on the company's financials and positive news for the broader renewable energy industry. Even with the seeminingly positive news, fundamental issues in the SunEdison family remain.
As for other positive movers in the market on Monday:
Chesapeake Energy (CHK): This Oklahoma-based oil and gas company was one of the worst-performing stocks in the S&P 500 in 2015 as shares fell 77.3%. However, on Monday shares closed up 10.4%, despite the company being downgraded to Underperform by Raymond James, which cited "weak natural gas price forecast and balance sheet concerns."
Lululemon Athletica (LULU): Lululemon closed up 6.5% on Monday following analyst upgrades from Wells Fargo and Jefferies as well as an increased price target from JPMorgan. The Canadian-based athletic apparel maker ended 2015 down 5.11%, which means it underperformed the S&P 500. It is possible that 2016 will be a better year for the company as many of its production and inventory problems are well on their way to being rectified.
Genworth (GNW): Shares of this Virginia-based insurance company eked out a modest 1.88% gain on Monday despite shedding 55% in 2015. Real Money columnist James Passeri called out Genworth CEO Thomas McInerney's tendency to offer assurances to customers even though the results rarely delivered.
Box (BOX): Short interest accounts for 31% of this California-based online file sharing company's shares. On Monday shares closed up 2.9% on little news but it may be getting a slight boost from this week's CES conference in Las Vegas.
GoPro (GPRO): Shares fell 73% in in 2015 but closed up 3.8% on Monday. With short interest accounting for 42% of its shares, it is one of the most shorted stocks trading on the Nasdaq. As with Box, it is possible this week's CES conference is partially responsible for the California-based manufacturer of action cameras.
Is Monday's trading the beginning of a trend for these companies?