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)

% Change

52-Week Range

Cambrex (NYSE:CBM)





Aircastle (NYSE:AYR)





Media General (NYSE:MEG)





Alexander's (NYSE:ALX)





Medco Health Solutions (NYSE:MHS)





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

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 92,000-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.

We begin with Medco Health Solutions, which joins what seems like an endless string of health-care providers in either cutting guidance or reducing benefits to trim costs. With peers HealthNet and WellPoint (NYSE: WLP  ) , it's the former. With Medco Health, it's the latter.

Well, maybe. On Monday, the Centers for Medicare and Medicaid Services lowered reimbursements for mail-order diabetic supplies -- a key product for Medco Health's PolyMedica unit. Profits could suffer as a result.

Next up is Media General, which late last week said its February revenue was down 11% thanks to a weakening advertising environment in its local markets. Tampa, in particular. Quoting from its press release:

The year-over-year decline was primarily attributable to lower Publishing Division revenues, driven mostly by a continued decrease in Classified advertising, especially in the Tampa market.

Media General CEO Marshall Morton proposes to solve the problem by cutting costs, as all papers have. Trouble is, cost of revenue has increased faster than revenue since 2004. Anyone want to bet it'll be easy to reverse that trend?

But our winner is Aircastle, an aircraft leasing company that had been singing its own praises as late as a month ago. Here's CEO Ron Wainshal commenting in the company's fourth-quarter press release:

We're very pleased with the results of our investment activities this year and have constructed a well diversified global portfolio of high utility assets. Moreover, we've capitalized on the continuing strength in aircraft demand by extending terms and signing and committing leases for nearly all of our placement needs for 2008 and have made significant progress on our 2009 placements.


So good were the feelings surrounding Aircastle up through then that our No. 2 Fool in CAPS, TDRH, wrote this at the end of last year:

With a P/E of 16.08 and a dividend yield of just over 10% I believe an economic slowdown is already priced into this stock. Would appear that the dividend is relatively "safe" with the recent increase.

"Safe" wasn't all that poor an assumption. Aircastle had boosted its dividend for five quarters in a row. And while carriers were still struggling -- to the point that Delta (NYSE: DAL  ) and Northwest were engaged in merger talks -- Aircastle appeared strong.

But all that was before Monday, when Aircastle announced a 64% cut in its dividend, as well as cuts in its available borrowing. Not at all awesome.

Aircastle and its descending dividend and lethargic liquidity ... 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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10/25/2016 4:02 PM
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