The CAPS Screen: Stay Away From These 5 Financial Time Bombs
By
Ilan Moscovitz
June 24, 2008
|
Sift through the wreckage of beaten-down companies, and you'll likely find a few wonderful stocks. Lately, the stock market has blessed patient investors with plenty of thrashed financial companies.
But the savviest investors know that willy-nilly contrarianism isn't a sure path to riches. As financial disasters Countrywide Financial (NYSE: CFC) and Thornburg Mortgage (NYSE: TMA) illustrate, companies often get punished for all the right reasons. And in those cases, their plight can be as bad as you think, and worse.
With that in mind, I used our new Motley Fool CAPS screening tool to find beaten-down financial stocks that the online CAPS community loves to hate. These are the stocks CAPS players avoid like the plague.
They are also:
- Capitalized at more than $200 million.
- Down at least 25% over the past year.
-
Rated one star, the lowest possible rank, by our CAPS community.
Remember, in the first year for which we have data, one-star companies flamed out with an average loss of nearly 17%.
|
Company
|
Share Price
|
Market Cap
|
Price Drop
|
|
Ambac Financial (NYSE: ABK)
|
$1.91
|
$548 million
|
(97.8%)
|
|
Fannie Mae (NYSE: FNM)
|
$22.34
|
$21.8 billion
|
(65.8%)
|
|
Lehman Brothers (NYSE: LEH)
|
$22.80
|
$12.6 billion
|
(69.9%)
|
|
Merrill Lynch (NYSE: MER)
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$34.54
|
$34.0 billion
|
(58.7%)
|
|
Washington Mutual (NYSE: WM)
|
$5.96
|
$6.3 billion
|
(86.0%)
|
Data from Motley Fool CAPS and Yahoo! Finance as of June 23. Price drop calculated from 6/29/07 through 6/23/08.
Are these companies poised for a turnaround? Or is the pain just beginning? Come and join us at CAPS to let us know what you think. Our 110,000-strong (and counting) CAPS community wants to hear your opinion.
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