Bad days. We all have them; some of us deserve them.
Here are five stocks whose naughty ways drew investors' scorn on Wednesday.
|
Company |
Closing Price |
CAPS Rating (5 Max) |
% Change |
52-Week Range |
|---|---|---|---|---|
|
Blue Nile |
$44.67 |
** |
(17.05%) |
$37.85-$106.16 |
|
Opnext |
$4.65 |
**** |
(16.06%) |
$3.77-$19.95 |
|
MGIC Investment |
$12.61 |
* |
(11.07%) |
$10.40-$67.41 |
|
Daktronics |
$17.54 |
**** |
(9.96%) |
$16.53-$32.37 |
|
Cooper Companies |
$36.96 |
* |
(6.57%) |
$35.97-$57.60 |
Naughty?
Well, OK, we can't exactly call these stocks naughty. There are days when five-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 digital jeweler Blue Nile, which gave surprisingly dull guidance for 2008. I can't say it better than Foolish colleague Rick Munarriz. Quoting from his take on the report:
Top- and bottom-line growth of 10% and nil, respectively, fall well short of Wall Street's targets. Analysts were pegging Blue Nile's 2008 prospects to produce a 21% net sales gain and a heartier 23% advance in earnings per share. That's not going to happen. Blue Nile has historically provided conservative guidance, but it's never been this far off the mark.
Worse, 10% growth isn't even close to what I or anyone else would expect from an established fast mover.
Worser
Next up is medical device maker Cooper Companies, which announced that CEO Steven Neil had resigned, raising concerns about the company's future results.
But this was an ugly stock story long before Neil left. Margins and returns on capital have both declined steadily since 2004. CAPS All-Star TheStillMan put it best in his pitch from a year ago. Quoting:
Yet another grossly overvalued, 'no moat' company. Revs are increasing at a snail's pace, with earnings barely keeping track of the gastropod. All of this for a P/E of 34? I don't think so.
The stock has declined nearly 25% since. Good call, Fool.
Worst
But our winner is MGIC Investment, which may have set a new standard for spin with this from its press release: "To strengthen the company's ability to capitalize on its strong business fundamentals, the Company has retained an advisor to assist it in exploring alternatives for increasing its capital." (Emphasis added.)
Really? "Strong business fundamentals?" This, from the company that just reported a $1.47 billion net loss and which expects further losses in 2008? (Sigh.)
Why not just say that loss reserves more than doubled year over year -- not including a new $1.2 billion reserve for "Wall Street bulk transactions" -- and that, in the face of such a stark downturn, it'd be prudent to have additional capital? It's not like peers Radian
MGIC and its spin-happy management team ... Wednesday'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.
