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

VeriFone Holdings (NYSE:PAY)

$26.03

****

(45.80%)

$31.45-$50.00

BearingPoint (NYSE:BE)

$2.94

*

(19.45%)

$3.06-$8.56

Targacept (NASDAQ:TRGT)

$8.01

**

(16.56%)

$6.80-$12.35

Fleetwood Enterprises (NYSE:FLE)

$4.64

*

(15.17%)

$4.64-$11.41

HSW International (NASDAQ:HSWI)

$4.80

*

(9.43%)

$4.75-$11.48

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 76,000-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 Emperor Nero. They don't believe any of these stocks are worth owning, and they even think some may be worth shorting.

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

Worse
We begin with BearingPoint, which lost a whole lot of moola and its CEO on Monday. As far as results go, BearingPoint lost $0.32 per share in its third quarter, far more than the Street or, if yesterday's sharp sell-off is to any indication, more than investors had expected.

But it's the CEO change that bothers me more than the results. Chief operating officer Ed Harbach is replacing Harry You so that he can, um, pursue "other opportunities."

Balderdash.

Even though BearingPoint won't say so, it's pretty clear that You and his colleagues clashed over the need to sell the consultant's European business unit. Quoting from the press release announcing Harbach's appointment:

Ed's appointment reflects the Board's determination that the best way for the Company to create value for its shareholders, clients and employees is by intensifying our focus on operations -- and leveraging the full scale and scope of our global business, including continuing to own and operate our European practice as an important part of our consolidated business. (Italics added.)

Translation: We didn't like the direction Harry was taking the company, so we asked him to leave.

This is a big ship with no rudder, Fool. Watch out for those rocks.

Worser
Next up is Targacept, which failed a mid-stage trial for pain reliever TC-2696, which was intended to offer superior relief to patients after oral surgery.

No such luck. Patients participating in the Phase II trial realized no meaningful improvement over a placebo in the four to six hours following molar extraction surgery. As a result, Targacept says it will have to convene with partner GlaxoSmithKline (NYSE: GSK  ) in evaluating the drug.

Anyone want to bet that the decision will be anything other than to kill it? I didn't think so.

Worst
But our winner is payments processor VeriFone. Normally a four-star stock like this one would have no chance of making this list. VeriFone is especially problematic, for it is cheaper than competitor NCR (NYSE: NCR  ) on a PEG basis.

Yet we can't ignore the spectacular blunder that management copped to Monday. Executives plan to restate results from the last nine months because of errors in valuing inventory.

Hang on, it gets worse. Management estimates that its mistake will consume roughly $30 million, or 80% of its pre-tax income through the first nine months of 2007. Doesn't anyone at VeriFone know how to use a calculator? Or, better yet, a spreadsheet?

A 30% mistake would be bad, but understandable, if the accounting were complex enough. A 50% mistake would be pretty close to unforgivable but, seeing as we've all made mistakes, I'd give VeriFone a pass here, too.

But 80%? Eighty freaking percent?!? VeriFone and its anyone-seen-the-abacus? management team ... 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.

Meet me back here tomorrow for more stock horror stories.


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