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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:


Closing Price

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State Street (NYSE:STT)










Northrop Grumman (NYSE:NOC)










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 our newsletter recommendations appear here. Today isn't one of those days, however.

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 96,000-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 MGM Mirage, which on Tuesday said that it's firing more than 400 middle managers and staff because of lackluster business at its Las Vegas properties.

But that can't be too surprising. CFO Dan D'Arrigo said as much in MGM's fourth-quarter conference call: "We are definitely seeing the effects of a weakened economy. It's mostly prominent in markets outside of Las Vegas and to some degree, our mid-market properties in Las Vegas."

Or, in simpler and perhaps crude terms: What happens elsewhere, hurts Vegas.

Next up is Crocs, which yesterday bit investors when management sharply lowered guidance for the upcoming quarter.

What troubles me, though, and why Crocs makes our list, is the hyperbole. Rarely have I seen such blatant bloviating. Here's CEO Ron Snyder from Monday's press release:

... Given our current inventory position coupled with our demand driven manufacturing model, we believe we are well positioned to meet any potential upside that materializes during our peak summer season. [Emphasis added.]

Please, sir. You may be correct in theory. Trouble is, you just closed a factory in Canada because, presumably, supply didn't meet demand as it should have.

And when inventory grows twice as fast as revenue in Q3 and then again in Q4, you don't have a "demand-driven manufacturing model." You're not Dell. Please stop pretending that you are.

But our winner is AMR, whose progeny, American Airlines, canceled 3,000 flights last week and yesterday suffered the visible ire of its pilots in a series of worldwide protests.


Time for a reality check. My math says that AMR is due to lose at least $50 million from flight disruptions, and will suffer no less than $10.2 million in fines. Yet the stock chugs along as if these losses aren't to be.

Talk about crazy. If anything, AMR -- which could be facing even tougher competition via this week's merger of Delta (NYSE: DAL  ) and Northwest (NYSE: NWA  ) -- is a screaming short right about now.

And not just for financial reasons. Labor relations are already bad and, if yesterday's protests are to be believed, about to get a lot worse. Why? Complaints on both sides border on the irrational.

Pilots, for example, blame management for poor customer service. Management, conversely, defends obscene executive pay for poor financial performance. Both are wrong. Unless they come together to, as one insightful pilot put it, "fix our airline for the long term," managers, employees, customers, and shareholders will all suffer.

It doesn't have to come to that, sirs.

AMR and its low-flying labor relations ... 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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Related Tickers

12/31/1969 7:00 PM
AAMRQ.DL $0.00 Down +0.00 +0.00%
CROX $7.88 Up +0.02 +0.25%
Crocs CAPS Rating: **
MGM $26.28 Up +0.18 +0.69%
MGM Resorts Intern… CAPS Rating: ***
NOC $216.46 Up +0.60 +0.28%
Northrop Grumman CAPS Rating: ****
STT $71.43 Up +0.55 +0.78%
State Street CAPS Rating: *****