Tuesday's Worst Stocks in the World

Bad days. We all have them, but some of us deserve them. Here are five stocks whose naughty ways came under the watchful eyes of investors on Tuesday:

Naughty?
Well, OK, we can't exactly call these stocks naughty. But none of them get much love from our 65,000-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 that some may be worth shorting.

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

Worse
DTS led our list of decliners for reasons that have yet to be reported, but CAPS investors know why they don't like the stock. Here's All-Star investor whatismyoption:

Margins and cash flow have been deteriorating, while DTS still sells at a premium to its industry. Sitting on a cliff and only needs a little nudge to take a large fall.

And not just a little premium, either. This maker of products for enriching home entertainment products such as DVD players trades for 60 times current year earnings estimates, resulting in a stratospheric 3.0 PEG ratio.

Confused? Think of the PEG as a measure of value. Less than 1.0 equals potentially cheap. 1.0 to 1.5 equals no worse than fairly priced. 2.8 is, you might say, the nosebleed section at the more than 100,000-seat University of Michigan stadium.

Worser
Canadian biotech Aeterna makes our list for announcing that a new business plan will require it to burn between $25 million and $27 million in cash over the next year, leaving just $35 million in the bank.

You know what that means. Even if a brighter future is ahead -- management seems to think so -- Aeterna will almost certainly have to raise additional funds to stay afloat, which means existing shareholders will suffer the indignity of further dilution. Ouch.

For its part, Aeterna says it will sell assets to raise funds. Let's hope it raises enough.

Worst
But our winner is Aventine Renewable Energy. This ice-cold ethanol producer has lately been the subject of Wall Street's downgrade machine. And yet the pummeling appears to be very well deserved.

Why? Returns on capital have gone south like geese for the winter:

Part of the problem could be Aventine's spending spree. A new 57-million-gallon ethanol production facility was completed this spring. But capital investment alone isn't enough, writes Foolish colleague Jack Uldrich:

Companies can't just ramp up their production capacity and expect to earn outsized profits. The successful ones will need to continue to find innovative ways to improve efficiencies, reduce energy expenditures, hedge against higher corn prices, and cut down on transportation costs.

CAPS All-Star UncommonSense adds:

Ethanol burns inefficiently and releases more toxins into the air than gasoline (although it does release less Co2) ... Even if we converted every acre of corn in the U.S. to ethanol, it would power roughly 8% of [the] vehicles on the road.

'Nuff said. Aventine Renewable Energy ... today's worst stock in the CAPS world.

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See you back here tomorrow for more stock horror stories. Or, if you don't like this feature, please let me know here.