Thursday'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 Thursday:


Closing Price

CAPS Rating (out of 5)


52-Week Range

Huntsman (NYSE:HUN)





Pier 1 Imports (NYSE:PIR)





WellCare (NYSE:WCG)





Motorola (NYSE:MOT)





Circuit City (NYSE:CC)





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

Well, OK, we can't exactly call the stocks on this list naughty. There are days when five-star winners and Motley Fool newsletter recommendations appear here. Today isn't 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 110,000-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 Motorola, whose shares touched a new five-year low yesterday after a contract manufacturer of its devices told investors that Motorola is "having difficulties."

The response from our top CAPS investors: Duh. More than a quarter of the All-Stars who've rated Motorola give it a thumbs-down. Freemoney101 says the company makes "poor quality products." blackhawk86 says Motorola "used to be a good company."

Used to be? Ouch.

But maybe blackhawk86 is right. Apple (Nasdaq: AAPL  ) , Nokia (NYSE: NOK  ) , and Samsung, whose new Instinct phone just launched, are bumping elbows in a race to be the innovator in smartphones. Motorola, on the other hand, can't seem to find the starting line.

Hello? Moto?

Next up is Pier 1 Imports, whose first-quarter results came in below Wall Street's expectations. Same-store sales fell 5.4%.

All-Star CAPS investors have been bearish on Pier 1 for months. Here's how No. 2 rated CAPS Fool TDRH described the retailer in December: "Pier One is the weak gazelle in a bloated retail market. This [F]ool does not believe that a quick turnaround is in the making under current macroeconomic conditions."

Agreed, though I'm also concerned about management. How is it that executives are even thinking of combining with Cost Plus when their own business needs an overhaul? Crazy.

But our winner is Circuit City, which also reported awful results. Revenue was down 7.4%. Same-store sales declined 12%. And, thanks to aggressive discounting, gross margin fell from 22.5% to 20.8%.

Wait, it gets worse. All those hoping the retailer would yield 4.0% or so during a proposed turnaround just got their hopes dashed. Management has suspended the dividend to "conserve capital."

Good idea, I guess. Circuit City's balance sheet is $272 million lighter in cash and investments than it was a year ago. Total debt is up $67 million over the same period. A new record for capital consumption is within reach; all that's left is to complete an ill-conceived merger with fellow cash-cruncher Blockbuster. Call the Guinness people!

Circuit City and its who-needs-firewood-when-you've-got-all-this-cash-lying-around management team ... Thursday'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 Tuesday with more stock horror stories.

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11/10/2008 4:08 PM
CC.DL2 $0.10 Down +0.00 +0.00%
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