What Happened?
A number of stocks jumped in the afternoon session after investors continued to pile into value-oriented names amid growing valuation concerns. This shift reflected growing caution over high valuations within the technology and artificial intelligence (AI) spheres. As market participants reassessed risk, they reallocated capital from growth-heavy indices, like the Nasdaq, to companies in areas like industrials and financials, perceived to be more reasonably priced. Contributing to the positive momentum, markets remained hopeful that a prolonged 40-day government shutdown would be over. The U.S. Senate approved a compromise funding package, which was pending a vote in the House. The potential end to the shutdown brought a sense of relief to markets.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Apparel and Accessories company Stitch Fix (NASDAQ: SFIX) jumped 3.1%. Is now the time to buy Stitch Fix? Access our full analysis report here, it’s free for active Edge members.
- Apparel and Accessories company Hanesbrands (NYSE: HBI) jumped 3.9%. Is now the time to buy Hanesbrands? Access our full analysis report here, it’s free for active Edge members.
- Real Estate Services company Opendoor (NASDAQ: OPEN) jumped 4.5%. Is now the time to buy Opendoor? Access our full analysis report here, it’s free for active Edge members.
- Footwear company Genesco (NYSE: GCO) jumped 3.4%. Is now the time to buy Genesco? Access our full analysis report here, it’s free for active Edge members.
- Apparel and Accessories company VF Corp (NYSE: VFC) jumped 4.7%. Is now the time to buy VF Corp? Access our full analysis report here, it’s free for active Edge members.
Zooming In On VF Corp (VFC)
VF Corp’s shares are extremely volatile and have had 31 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 15 days ago when the stock dropped 8.1% on the news that the company's weak sales forecast for the upcoming quarter overshadowed its better-than-expected third-quarter results. Despite beating Wall Street's expectations with adjusted earnings of $0.52 per share and revenue of $2.8 billion, the underlying numbers revealed challenges. Revenue declined 3.5% year-over-year, and earnings per share were down from $0.60 in the same period last year. Investors appeared to focus on the forward-looking guidance, as the company projected a 2% year-over-year sales decline for the fourth quarter. While the company did improve its operating margin, the persistent sales decline and downbeat forecast signaled ongoing difficulties for the apparel conglomerate, which owns brands like The North Face and Vans.
VF Corp is down 28% since the beginning of the year, and at $15.50 per share, it is trading 42.4% below its 52-week high of $26.93 from January 2025. Investors who bought $1,000 worth of VF Corp’s shares 5 years ago would now be looking at an investment worth $203.56.
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