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Thursday's Worst Stocks in the World

Bad days. Who doesn't have bad days? Some of us deserve them.

Here are five stocks whose naughty ways drew investors' scorn on Thursday:


Closing Price

CAPS Rating (out of 5)

% Change

52-Week Range

Electronics for Imaging (NASDAQ:EFII)





Men's Wearhouse (NYSE:MW)





Barnes & Noble (NYSE:BKS)





Ruby Tuesday (NYSE:RT)





Stein Mart (NASDAQ:SMRT)





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 Motley Fool CAPS community of 80,000 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 they think some may be worth shorting.

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

We begin with Stein Mart, which reported a 9% decline in same-store sales during December and a plan to blow out obsolete inventory. Nothing new there. Quoting CEO Linda Farthing from the company's press release:

Sales declined as expected until Christmas. Post-Christmas sales, driven by heavier markdowns, were positive, helping to offset the earlier double-digit declines and produced a 5.7 percent decrease in comparable store sales for the month of December. [Emphasis added.]

Translation: We didn't really sell anything till we held a clearance sale.

Next up is Barnes & Noble, which suffered declining same-store sales for the nine-week period ended Jan. 5. That's somewhat to be expected with the sharp decline in CD sales.

Here's the problem: Were Barnes & Noble's troubles merely symptomatic of an industrywide downturn, peers such as Borders Group (NYSE: BGP  ) would have announced equally poor results. That didn't happen.

To the contrary; Borders reported a 2.4% comps gain at its superstores and a 3.9% increase in overall company sales. (Though, to be fair, profits are likely to be flat or slightly down due to discounting, management says.)

The beneficiary here? Apple (Nasdaq: AAPL  ) , whose iTunes store has massively disrupted the music retailing business and the bookstores that depend on it.

But our winner is Electronics for Imaging, or EFI, which said it expects to earn $0.22 to $0.24 a share for the fourth quarter after excluding one-time items. Analysts, by contrast, were expecting a $0.37 per-share profit.

What caused the schism? Weak demand. EFI, you see, makes controllers that bring printers into a network and give them more functions, such as color control or the ability to print in wide formats.

The trouble with a business model like this is that it requires the patronage of a small number of printer manufacturers, which, apparently, is harder to come by today. Top customers Canon and Xerox aren't ordering as much as they used to.

Hang on -- it gets worse. According to at least one analyst, EFI's customers are already developing controllers of their own, which, in turn, would eliminate the need to outsource. If true, it would almost certainly cripple EFI and (gulp) could force the company out of business.

EFI and its oh-so-fragile business model ... Thursday'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 Tuesday with more stock horror stories.

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Related Tickers

10/25/2016 4:02 PM
BKS $10.45 Down -0.45 -4.13%
Barnes and Noble CAPS Rating: *
EFII $43.03 Down -0.57 -1.31%
Electronics For Im… CAPS Rating: ****
SMRT $6.19 Down -0.03 -0.48%
Stein Mart CAPS Rating: ***
AAPL $118.25 Up +0.60 +0.51%
Apple CAPS Rating: ****
BGPIQ.DL $0.00 Down +0.00 +0.00%
Borders Group CAPS Rating: *
TLRD $16.94 Up +0.05 +0.30%
Men's Wearhouse CAPS Rating: **