Monday's Worst Stocks in the World

Bad days. We all have them; some of us deserve them.

Here are five stocks whose naughty ways drew investors' scorn on Monday:

Company

Closing Price

CAPS Rating (out of 5)

% Change

52-Week Range

FuelCell Energy (NASDAQ:FCEL)

$10.06

**

(21.89%)

$5.84-$13.14

Palomar Medical Technologies
(NASDAQ:PMTI)

$15.92

****

(15.18%)

$15.77-$55.02

Syms (NYSE:SYM)

$15.67

**

(7.66%)

$12.17-$22.08

First Horizon National (NYSE:FHN)

$18.58

**

(6.11%)

$17.65-$45.44

Fleetwood Enterprises (NYSE:FLE)

$6.46

*

(4.15%)

$4.45-$11.41

Sources: The Wall Street Journal, Yahoo! Finance, Motley Fool CAPS.

Naughty?
Well, OK, we can't exactly call these stocks naughty. But none of them gets much love from our 78,000-person-strong Motley Fool CAPS community of amateur and professional stock pickers.

To the contrary -- when it comes to these stocks, CAPS investors have gone thumbs-down more often than film critic Roger Ebert. They don't believe any of these stocks are worth owning, and they think some may even be worth shorting.

Which of today's candidates is worst? Read on, dear Fool.

Worse
We begin with FuelCell Energy, which disappointed investors when Connecticut's public utility commission ordered only six of the company's fuel cells. Some were apparently expecting at least double that.

But that's not what worries me when it comes to FuelCell. This does:

Metrics

Trailing 12 Months

2006

2005

2004

Return on Capital

(24.1%)

(24.2%)

(19.1%)

(22.9%)

Gross Margin

(56.0%)

(114.1%)

(111.6%)

(114.3%)

Source: Capital IQ, a division of Standard & Poor's.

Worser
Next up is Palomar Medical, which is renegotiating a deal with Procter & Gamble's (NYSE: PG  ) Gillette division. As much as $10 million in future revenue could be at risk. 

How big would that be? Equal to roughly 7.5% of Palomar's trailing revenue.

I'd be less worried if Palomar were the only supplier of light-powered devices for cosmetic treatments. Not so. Peers include Syneron Medical (Nasdaq: ELOS  ) and Cynosure. And both are cheaper than Palomar after you factor in growth:

Company

Projected P/E

2008 PEG

Cynosure

17.77

0.46

Syneron

8.68

0.55

Palomar

12.94

0.78

Source: Capital IQ, a division of Standard & Poor's.

Oops.

Worst
But our winner is Syms, which appears to be on the juice. Why? Excuses. Here's how the ailing retailer explained away its decision to delist its shares on the New York Stock Exchange in a Friday press release:

The Company is taking these actions principally to minimize financial and administrative burdens associated with ... regulatory compliance under the Sarbanes-Oxley Act (SOX) of 2002. The Company estimates that the savings in both direct and indirect costs associated with deregistration will be substantial on an ongoing basis and that the direct recurring annual savings will exceed $750,000. In addition, the Company also expects that management will be able to better focus its attention and resources on continuing to improve operations and enhancing shareholder value. [Italics mine.]

Let's review the problems with this take:

  • $750,000 is less than .03 of 1% of Syms' $280.8 million in revenue from the trailing 12 months.
  • Syms last produced returns on capital above 2% -- yes, that's right, 2% -- in 1999.

Enhance shareholder value? How about creating some first? Syms, with its the-SOX-made-me-do-it management team, is Monday's worst stock in the CAPS world.

Do you agree? Disagree? Let us know what you think by signing up for CAPS today. It's 100% free to participate.

I'll be back tomorrow with more stock horror stories.

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