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Why IPG Photonics Corp. Shares Fell 11.1% Last Month


What happened

Shares of IPG Photonics (NASDAQ: IPGP) fell 11.1% in September, according to data from S&P Global Market Intelligence . The maker of fiber lasers and fiber amplifiers had nearly no news of its own last month, but the stock plunged anyway due to rumblings elsewhere in the fiber-optic equipment sector.

So what

In the first week of September, analyst firm B. Riley downgraded two major players in the fiber-optic laser sector. Citing unpredictable order volumes due to the ongoing trade war with China, analyst Dave Kang lowered both Fabrinet  and II-VI  from buy to hold ratings. Many sector peers also lost ground on this news; IPG Photonics shares fell 9.5% over the next two days.

A bundle of fiber-optic cable strands in front of dark clouds and a lightning bolt.

Image source: Getty Images.

Now what

IPG Photonics followed up on that weak September performance with a disappointing preliminary earnings report in early October. The company will miss its own guidance targets across the board, and CEO Valentin Gapontsev pointed to difficulties closing sales while the Chinese-American trade war is going on. The stock took another 12% beating on that report.

IPG Photonics investors have now absorbed a 41% price drop over the last six months. The fiber-optic equipment market -- which, in IPG's case, spans both networking and industrial manufacturing lasers -- has been jittery ever since the tariff-based saber rattling started, and will most likely stay volatile until the trade war is over.

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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends IPG Photonics. The Motley Fool recommends II-VI. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Personal Finance , Stocks
Referenced Symbols: IPGP



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