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

Currently
Fetching

CAPS Rating

%
Change

52-Week
Range

Noven Pharma. (NASDAQ:NOVN)

$13.05

**

(21.81%)

$12.91-$27.80

Air France - KLM (NYSE:AKH)

$39.79

**

(3.8%)

$30.81-$52.17

Standard Pacific (NYSE:SPF)

$5.31

*

(7.65%)

$5.14-$30.52

Trina Solar (NYSE:TSL)

$53.38

**

(7.65%)

$17.06-$73.06

Aeropostale (NYSE:ARO)

$19.94

**

(7.51%)

$18.29-$31.88

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 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, but that some may be worth shorting.

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

Bad
We begin with Aeropostale, which has been an unloved growth stock for some weeks. More hate came the retailer's way Monday with a downgrade from analyst Caris & Company.

The Associated Press reports that Caris believes that Aeropostale is seeking higher margins this year via cost cuts, which could prove unsustainable with same-store sales declining as they are.

I'd be more concerned if we were talking about more than a couple of quarters and a stock that hadn't been punished as much as this one has. Nevertheless, Caris has a point: no company has ever cut its way to long-term growth. Aeropostale is very unlikely to be the first.

Worse
Next up is Trina Solar, which appears to be suffering alongside troubled peer LDK Solar (NYSE: LDK  ) . Both make components for power-generating photovoltaic cells.

But LDK appears to be in worse shape. A former official has accused the company of inventory problems in news reports. Then, on Monday, Barron's reported quality issues. LDK denies both reports and, earlier today, raised its third-quarter revenue forecast.

Who's right? Who cares? Both Trina and LDK are new to the process of building solar components. Quoting from the Barron's account:

Eager for clean, oil-independent energy, China's government encouraged entrepreneurs to start making solar-power components. Businesses from diverse corners of the economy answered the call. Until April 2006, Trina Solar made aluminum siding. LDK's 32-year-old chief executive and controlling shareholder, Xiaofeng Peng, made industrial safety shoes and gloves.

In other words, owning these stocks for exposure to the so-called "solar boom" is like hiring a pastry chef to build you a house. Eeeeeeeewwwww.

Worst
Our winner is Noven Pharmaceuticals. On Monday it reported that its once-daily drug for treating bipolar disorder failed a phase 3 trial. Go back to the drawing board, guys.

Or, maybe, back to the auction block. Yesterday's failure comes from the scientists at JDS Pharmaceuticals, which Noven acquired for $125 million over the summer. Oops.

Could this have been avoided? That's impossible to know for sure, but Foolish colleague Brian Lawler offered some insight here:

If the patients treated with the JDS lithium had shown an improvement in their bipolar disorder, there would have been a 15% chance that this improvement occurred at random. As Noven knows, this isn't good enough to pass muster with the Food and Drug Administration. If it wants to bring its lithium product to market, it will have to run another clinical trial that yields more conclusive results. [Emphasis added.]

Translation: JDS may have been a $125 million crapshoot.

Maybe this was a risk that had to be taken. Noven, after all, had faced plenty of skeptics. Here's how CAPS investor damshadow put it in December: "With the scientific community down on hormone therapy for women (i.e. breast cancer), this guy's going down."

Fast-forward 10 months and that pick is beating the S&P 500 by -- wait for it -- 57 points. Good call, damshadow. Noven Pharmaceuticals ... 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.

See you back here tomorrow for more stock horror stories.


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