Wednesday'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 Wednesday:

Company

Closing Price

CAPS Rating (out of 5)

 

Change

52-Week Range

Central Garden & Pet (Nasdaq: CENT  )

$4.74

**

(35.77%)

$3.90-$14.17

US Airways (NYSE: LCC  )

$3.20

*

(15.34%)

$3.11-$36.81

Amerigroup (NYSE: AGP  )

$23.36

**

(14.05%)

$22.80-$41.00

Centex (NYSE: CTX  )

$13.96

*

(12.26%)

$13.87-$44.80

Continental Airlines (NYSE: CAL  )

$12.10

*

(11.03%)

$12.05-$38.79

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 on this list. Today, sadly, is one of those days.

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 105,000-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 Continental Airlines, whose pilots were picketing company headquarters yesterday in a quest for a new contract.

My guess is that the situation will get worse before it gets better. Why? Ask John Prater, president of the Air Line Pilots Association union. He pointed the finger at management in an interview with The Associated Press yesterday. Quoting: "Don't try to use the price of gas. The industry is unstable, and the only way to add labor stability is through a solid contract."

Don't use the price of fuel? As what? A crutch? Talk about a nonstarter.

Let's review, folks. Per-barrel oil prices have more than doubled over the past year. No business in the world -- let alone those in the underperforming airline industry -- can raise prices that fast. Not one.

Worser
Next up is homebuilder Centex, whose debt is now "junk," according to a Fitch Ratings downgrade issued on Tuesday.

Shares of the stock fell further yesterday. I think CAPS All-Star TheGarcipian best explains why in this pitch from March. Quoting:

Having continued its downward 2-year slide, Centex still looks to me like raw egg waiting to be fried. Purely from a timing perspective, Centex is the wrong place at the wrong time. It markets its houses to first-time homebuyers and those middle-class families wanting to "move up" the housing ladder. The queue for either clientele has been shrinking and will continue to do so for who-knows-how-long, probably at least through 2009. [Emphasis added.]

Wrong place, wrong time. I can't say it better than that.

Worst
But our winner is Central Garden & Pet, which made an appearance here in November when management said it would seek to make acquisitions despite a poor record of allocating existing capital.

Wait, it gets worse. Retained earnings -- otherwise known as the part of net income that has been kept by the company to fund growth -- turned sharply negative in the March-ended quarter, a warning sign that was flashing an even deeper and brighter shade of red yesterday.

That's when management told analysts that the company is facing rising costs that it can't pass along to customers. Consequently, Central Garden now says that its 2008 profit may come in below its prior-year net income. Uh-oh.

Central Garden & Pet and its airline-sized record of capital destruction ... 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.

Fool.com contributor Tim Beyers, who is ranked 17,282 out of more than 105,000 participants in CAPS, also writes for Rule Breakers. He hopes that Keith Olbermann doesn't mind the blatant theft of his "Worst Person in the World" segment from Countdown. Remember, Keith, imitation is the sincerest form of flattery.

Amerigroup is a Stock Advisor selection. Try this market-beating service for 30 days risk-free.

Tim didn't own shares of any of the stocks mentioned in this article at the time of publication. The Motley Fool's disclosure policy thinks it's fun to say "rutabaga."


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