Raymond James downgraded Newpark Resources (NR
) to market perform from outperform, citing an investigation into the company's processing and payment of invoices at its Soloco unit.
Analyst J. Marshall Adkins also notes that Chief Executive Officer Paul Howes placed three people on administrative leave, including Chief Financial Officer Matthew Hardey. While little detail was provided in a press release as to the extent or nature of the suspicious activities, the analyst thinks this is clearly the reflection of the newly appointed CEO's aim to reshape the company. The ambiguity surrounding the probe should act as a near term overhang, and prohibit any meaningful share price appreciation, the analyst says.