Unexplained stock price movement in LO and EXC.

Two days and two stocks were we have positions and movement unexplained.  Well maybe not. 

EXC, which we have posted on twice in the last week and suggested investment has done nothing but go down for two days.  The price has settled just in under $35 now.  That makes it now a 6% yield at this price. Even if it goes down more you get a nice dependable payout and safe company that is not going away or going bankrupt. As long as the lights must be on in the midwest EXC will be the one to sell them the power to make the switch work.  As to the stock price weakness there seems to be concern about just what will be the final annual profit per share of EXC once this merger is integrated fully.  Even if the low estimate of $2.25 actually happens it still covers the $2.10 dividend and this will be the bottom feeder year for this stock and company.  There is also the piling on effect happening as broker after broker downgrades the stock to make sure they cover their behinds when the weaker earnings are reported.  As Cramer says it is time to back up the truck.  The time will come for capital gains. 

LO , Lorillard a tobacco producer, is another stock we actually own as a long that has had serious weakness in the last couple of days. Today's drop off of over $5 per share follows and almost $3 per share yesterday.  This frankly is huge movement for what is considered a consumer stock that rarely moves much on a daily basis.  Look as we may we can find no reason for this move from the company, message boards, or analysts.   LO is down over $25 per share in short order.  Yes, they had a small miss on their latest earnings report, but that should not cause this kind of movement.  There are rumors that insiders have got info from the Obama administration that a ban on menthol is days away from being announced. Frankly we doubt that, but we have been fooled in the past by comments or policy from this crazy administration.  If Obama is so confident he can tell blacks, who are heavy users of menthol cigs, to go to hell to appease his liberal wing then indeed things are getting desperate in the White House. So who knows. 

The next few days will be interesting to see where these stocks move and if the movement is as strong as the past couple of days.  We are certainly feeling the pain from our positions in them and are seeing visions of the first half of 2012 when we got killed from positions in GG and ERF.  2012 has not been a kind year thus far.