Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Tuesday'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 Tuesday:


Closing Price

CAPS Rating

(5 max)





Occam Networks (NASDAQ:OCNW)





Quest Resource (NASDAQ:QRCP)





Domino's (NYSE:DPZ)





Nautilus (NYSE:NLS)





Radian Group (NYSE:RDN)





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

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.

We begin with Occam Networks, which restated earnings for 2004 through 2006. Errors ranged in scope from $200,000 to $1.7 million.

But the biggest problem wasn't with the bottom line. It was at the top, with revenue. Quoting from the press release:

The Audit Committee identified errors pertaining to the timing of revenue recognition rather than the ability to collect or ultimately realize revenue. The Audit Committee did not identify any instances where the Company recorded revenue that was not ultimately collected or realizable. [Emphasis added.]

Translation: "We may have stuffed the channel, but at least it swallowed."

Anyone else wondering whether a severe bout of indigestion is next?

Next up is Domino's Pizza, which made investors sick with an undercooked quarterly report. Earnings fell 55%. Free cash flow, meanwhile, declined 29%. Where's the dough, Domino's?

CEO Dave Brandon blamed higher expenses for Domino's woes:

Unprecedented cost pressures and a weak consumer environment negatively affected our domestic results in the quarter, which made striking the right balance between increasing prices, while operating in a period of declining traffic, very difficult. [Emphasis added.]

There's truth to what Brandon says. Interest expense nearly doubled, thanks to a recapitalization. Total cost of sales rose 5%. Obviously, Brandon and his team have a ton of work to do.

Why, then, is the company signing him to a new three-year employment contract? Quoting from the Domino's press release:

The Company reported that its Board of Directors has approved moving forward on a three-year employment agreement for Dave Brandon through 2010 at its October 11th meeting. The Company and Mr. Brandon are in the process of negotiating the terms of that agreement.

Mind a suggestion, Dave? Make sure that new contract puts a substantial portion of your salary and bonus at risk. That way, if your attempted turnaround fails, you'll pay the price right alongside the common investors betting on you.

But our winner is Pinnacle Gas Resources (Nasdaq: PINN  ) for the ludicrous spin it put on a $207 million all-stock sale to peer Quest Resource.

Here's how CEO Peter Schoonmaker described the deal in the press release:

The merger combines dominant acreage and operating positions in two prolific low risk resource plays with over one million acres under lease that will allow considerable growth in production, reserves and pipeline development. [Emphasis added.]

Ready for the actual numbers? Here you go:

Free Cash Flow








Quest Resource








Source: Capital IQ, a division of Standard & Poor's. *Trailing 12 months; numbers in millions.

Dominant? Low-risk? That's what you get when you combine two serial cash-burners? Pinnacle Gas Resources and its they'll-believe-it-if-we-say-it spin doctors ... Tuesday'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.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 538649, ~/Articles/ArticleHandler.aspx, 5/3/2016 5:01:22 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Tim Beyers

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At, he covers disruptive ideas in technology and entertainment, though you'll most often find him writing and talking about the business of comics. Find him online at or send email to For more insights, follow Tim on Google+ and Twitter.

Today's Market

updated 7 hours ago Sponsored by:
DOW 17,891.16 117.52 0.66%
S&P 500 2,081.43 16.13 0.78%
NASD 4,817.59 42.24 0.88%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

5/2/2016 4:00 PM
DPZ $120.37 Down -0.51 -0.42%
Domino's Pizza CAPS Rating: ****
NLS $17.88 Up +0.24 +1.36%
Nautilus, Inc. CAPS Rating: ***
RDN $12.87 Up +0.08 +0.63%
Radian Group, Inc. CAPS Rating: ***