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Friday'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 drew investors' scorn on Friday:


Currently Fetching

CAPS Rating





Clearwire (NASDAQ:CLWR)





Security Bank (NASDAQ:SBKC)





Leap Wireless (NASDAQ:LEAP)





Phoenix Tech. (NASDAQ:PTEC)





Sealy (NYSE:ZZ)





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

Well, OK, we can't exactly call these stocks naughty. But none of them gets 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 go so far as to say that some may be worth shorting.

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

We begin with Leap Wireless, which took an 8% drubbing after MetroPCS (NYSE: PCS  ) reported poor subscriber numbers. Leap and MetroPCS are peers, so the thinking is that if one is suffering, the other must be, too.

Even if that's not the case, investors may still get burned. MetroPCS bid $5.5 billion for Leap in early September, only to be rejected two weeks later. Were a sweetened deal agreed to, current Leap investors would be saddled with shares of MetroPCS -- a business that so far isn't answering the call for high returns.

Next up is Security Bank, which on Thursday reported that it would have to dramatically increase reserves to offset losses from a sharp decline in real estate values. Yeah, no one saw that coming.

But Security Bank may be worse off than some peers.

Consider the numbers. Security Bank will set aside between $16 million and $20 million to protect against loan losses in the second half of the year versus just $4.5 million for all of 2006. Management also said that loan growth could fall below earlier predictions of 10% to 12%. Shocking.

But our winner is mattress maker Sealy, whose most recent earnings report must be giving some investors insomnia.

I'll not bore you with all the numbers. Click here to get a comprehensive analysis from my Foolish colleague Alyce Lomax. Here's the relevant excerpt, "Third-quarter profit fell 27% to $21.5 million or $0.22 per share, and that's including beneficial tax implications; Sealy's tax rate in the quarter was slashed to 19.2% from 28.7%."

Yep, that'd be enough to give me the shivers. But it gets worse. Sealy suffered a sharp 4.6% decline in average selling prices, easily offsetting a modest 5.2% gain in domestic sales. Clearly, competition from Select Comfort (Nasdaq: SCSS  ) and Tempur-Pedic is taking hold.

Investor LiLNipsFatal expects the rout to continue:

While this isn't an awful company or an awful valuation, [Select Comfort] and [Tempur-Pedic] will continue to take Sealy's market share. Sealy has quite a bit of debt and its profitability pales in comparison ... As more and more people become interested in getting a better night's sleep, Sealy will suffer.

Who isn't interested in a great night's sleep? Mattress maker Sealy ... today'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. 

See you back here tomorrow for more stock horror stories.

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Related Tickers

12/31/1969 7:00 PM
ZZ.DL $0.00 Down +0.00 +0.00%
Sealy Corporation CAPS Rating: No stars
CLWR.DL $0.00 Down +0.00 +0.00%
Clearwire Corp CAPS Rating: **
LEAP.DL $0.00 Down +0.00 +0.00%
Leap Wireless Inte… CAPS Rating: *
SBKC $0.24 Down +0.00 +0.00%
Security Bank CAPS Rating: No stars
SCSS $19.17 Up +0.03 +0.16%
Select Comfort CAPS Rating: *****
TMUS $49.50 Down +0.00 +0.00%
T-Mobile US CAPS Rating: ***