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.

Naughty?
Well, OK, we can't exactly call these stocks naughty. There are days when four-star winners and newsletter recommendations appear here. Today, for example.

But, if you're an investor, you'll have plenty of bad days. The trick is to avoid dating -- or, worse, marrying -- your losers. That's why I listen when our 83,000-person-strong Motley Fool CAPS community of stock pickers speaks with a poor rating or a negative pitch. You should too.

Thus, here is today's list of the worst stocks in the world.

Worse
We begin with Pepsi Bottling, which yesterday reported a 39% decline in profits, including $11 million in restructuring, taxes, and other charges.

But Pespi Bottling makes our list because its case volume was as flat as the month-old root beer you've been meaning to clean out of the fridge. Case volume is an inventory measure; each "case" sold refers to a case of bottled or canned drinks. Every beverage baron, including Coca-Cola (Nasdaq: KO) and Jones Soda (Nasdaq: JSDA), measures success by the case.

When flat case volume meets higher revenue, as it did with Pepsi Bottling, it's probably because of price increases aimed at protecting margins. That's what we have here: The price of corn, used for creating the sweet syrup that makes soda so tasty, is way up thanks to demand for ethanol.

So what's the problem? Even with the increases, Pepsi Bottling couldn't defend its margins. Operating margin fell 11 basis points to 7.88%.

Worser
Next up is Pilgrim's Pride, which is having its own troubles with ingredients. Rising prices for chicken feed -- again thanks to rising corn prices -- and other essentials led to a $32.3 million net loss in its fiscal first quarter, more than triple what it had been in the year-earlier period.

Ken Pilgrim, chairman and interim president of the company, said dramatic action is necessary. Quoting from a company statement:

Given the unprecedented run-up in feed-ingredient costs, we believe the industry will have to take a much closer look at production levels for 2008 and that overall production is not likely to grow at the rate previously projected by the USDA. We will continue to closely monitor industry fundamentals and take whatever actions we feel are necessary to better balance our supply and demand and to position our company for sustained, profitable growth. [Emphasis added.]

Translation: If we can't count on passing through price increases, we'll artificially boost demand by raising and selling fewer chickens.

Yeesh. You know it's bad when a top chicken producer starts talking like an oil cartel.

Worst
But our winner is consultant LECG, which shot the Wall Street equivalent of a 25-foot airball in reporting preliminary results yesterday.

LECG said it would book $0.13 to $0.14 a share in profits before charges in its fourth quarter, well below earlier guidance of $0.24 to $0.26. Here's how CEO Michael Jeffery explained the shortfall in a statement:

As we stated on our third quarter call, demand was robust in October, and it remained strong through most of November. In December, however, we experienced far greater seasonality in our business than anticipated. More vacation was taken over the holidays than forecasted, particularly in Europe, and a number of key engagements wound down. [Emphasis added.]

Really? Extra vacations obliterated the bottom line? Either this is the world's most vulnerable business or Jeffery isn't being as forthright as he could be. Or -- gulp -- both.

LECG and the apparently puddle-thin moat around its profits ... Tuesday's worst stock in the CAPS world.

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