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:

Company

Closing Price

CAPS Rating (out of 5)

% Change

52-Week Range

Getty Realty (NYSE:GTY)

$15.41

*

(42.84%)

$13.33-$30.33

Shuffle Master (NASDAQ:SHFL)

$5.32

**

(26.11%)

$5.13-$19.78

Basin Water (NASDAQ:BWTR)

$5.29

*

(18.99%)

$4.10-$13.42

Sunrise Senior Living (NYSE:SRZ)

$19.59

*****

(14.60%)

$16.27-$42.97

Health Net (NYSE:HNT)

$31.01

**

(4.17%)

$27.83-$59.25

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

Naughty?
Well, OK, we can't exactly call these stocks naughty. There are days when five-star winners and newsletter recommendations appear here. Today is one of those days.

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 89,000-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 Health Net, which decided to review its outlook for 2008 after several of its peers issued profit warnings. (Among the list: WellPoint (NYSE: WLP  ) , which starred in this column one week ago today.)

But this also is no ordinary review. Health Net filed an 8-K with the SEC in which it said that management will wait till after this week's meetings with investors to complete its assessment. Quoting:

In response to recent events in our industry, the Company is reviewing its first quarter and full year plans to determine whether any adjustments to our guidance for 2008 first quarter and/or annual results are necessary. This review will not be completed until after the March 19 and 20 investor and analyst meetings. Therefore, the Company will provide an update on guidance once this review is completed.

Oh joy. I can hardly wait.

Worser
Next up is Shuffle Master, which issued an awful first-quarter earnings report. Foolish colleague Morgan Housel said it best, I think:

The Las Vegas company reported a first-quarter loss of $0.05 per share on Monday, down from a $0.06-per-share profit a year ago and an about-face from analysts' estimate of an $0.08-per-share gain. Note that the results would have been $0.04 better if one-time severance and legal costs were excluded. Revenue for the quarter gained little ground over the same period last year, growing a little more than 1% to $37.9 million. [Emphasis added.] 

Do the math with me. Even if you exclude the one-time costs, Shuffle Master still lost $0.01 per share. And a losing hand is, well, a losing hand.

Worst
But our winner is Sunrise Senior Living, an elderly care facilities manager that has earned five stars in CAPS but can't seem to get its books done. On Tuesday, the company said it would miss an extended deadline for filing its 10-K report for -- wait for it -- 2006.

2006!

So far, the New York Stock Exchange is playing nice, announcing Wednesday morning that it would give Sunrise another week to file. Not that it matters: The process for delisting could take at least two months. Perhaps that's why most Fools are willing to let the sun shine on Sunrise. Of the 82 All-Star investors now rating the stock in CAPS, 81 give it a thumbs-up.

Not everyone shares the love, though. Here's what CAPS investor jgjr0316 wrote in early February:

The service of this company at its senior living centers is diminishing and the current residents are finding other alternatives where service is equal or better at a much lower rate. [Emphasis added.]

I've no idea whether that's a fair criticism. But, looking at the financial data we do have, it's pretty clear that Sunrise is feeling pressure at the margins:

Metrics

2005

2004

2003

2002

2001

Gross margin

8.5%

8.9%

10.2%

22.4%

38.9%

Net margin

4.6%

3.5%

5.7%

12.8%

11.5%

Source: Capital IQ, a division of Standard & Poor's.

Sunrise Senior Living and its marginal margins and almost-forgotten financial statements ... Tuesday'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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