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:


Closing Price

CAPS Rating
(out of 5)



American Dairy (NYSE:ADY)





Mesa Air Group (NASDAQ:MESA)





Comverge (NASDAQ:COMV)










Ingersoll-Rand (NYSE:IR)





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

Well, OK, we can't call these stocks naughty. But none of them gets much love from our 77,000-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 and Emperor Nero combined. They don't believe any of these stocks is worth owning, and they think some may be worth shorting.

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

We begin with Ingersoll-Rand, which recently agreed to acquire air-conditioner maker Trane (NYSE: TT  ) for $10.1 billion.

A Wachovia analyst covering the details of the transaction said yesterday that investors had expected, and, given the sell-off, likely preferred a return of that capital via a stock buyback. No such luck.

Next up is Comverge, which last week completed a secondary offering of 4.6 million shares. Trouble is, very few of the shares that were sold benefited anyone besides insiders and early investors.

Six officers sold shares in the offering. Some sold more than 50% of their direct stakes. General Counsel Thomas Wren was one. He dumped 59,760 shares, roughly two-thirds of his direct holdings.

But our winner is American Dairy, which may have failed at an attempt to deceive investors.

Last week, the firm dismissed its primary accountant, Murrell, Hall, McIntosh & Co. Quoting from its original announcement (italics added):

American Dairy must change accounting firms by May 1, 2008. However, the Company expedited its previously announced efforts to engage a new accounting firm following notification of an informal SEC investigation related to individuals and entities that provided accounting or certain advisory services to American Dairy, including MHM and Henny Wee & Co. (HW). The Company currently believes the primary focus of the informal investigation is related neither to American Dairy's business operations nor any of its management, but rather to the independence of MHM and HW.

Translation: Our accountants got us in trouble.

Or did they? Not exactly, according to MHM. In a Reuters story from late Friday, MHM disputed American Dairy's characterization, saying that it was Henry Wee that lacked independence. MHM also said it offered to re-audit the firm's financial statements from 2004 to 2006 without Wee's involvement, thereby settling any potential conflicts.

American Dairy declined, MHM asserts.

Who's right? Who cares? American Dairy is without an accountant, has withdrawn its 2007 financial guidance, and is now the subject of an informal SEC probe. What else do you need to know?

American Dairy and its the-accountant-made-me-do-it 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.

I'll be back tomorrow with more stock horror stories.

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Related Tickers

10/26/2016 3:59 PM
DRYS $0.37 Down -0.02 -4.28%
DryShips CAPS Rating: **
IR $66.33 Up +1.73 +2.68%
Ingersoll-Rand CAPS Rating: ***
MESA $0.04 Down +0.00 +0.00%
MESA AIR GROUP, IN… CAPS Rating: No stars