By
Ilan Moscovitz
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More Articles
June 24, 2008
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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%.
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Company
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Share Price
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Market Cap
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Price Drop
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Ambac Financial (NYSE: ABK )
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$1.91
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$548 million
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(97.8%)
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Fannie Mae (NYSE: FNM )
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$22.34
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$21.8 billion
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(65.8%)
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Lehman Brothers (NYSE: LEH )
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$22.80
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$12.6 billion
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(69.9%)
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Merrill Lynch (NYSE: MER )
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$34.54
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$34.0 billion
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(58.7%)
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Washington Mutual (NYSE: WM )
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$5.96
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$6.3 billion
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(86.0%)
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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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