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

American Greetings (NYSE: AM  )

$14.04

*

(23.28%)

$13.90-$29.10

Rockwell Automation (NYSE: ROK  )

$45.77

***

(12.30%)

$44.89-$75.60

Monaco Coach (NYSE: MNC  )

$3.10

*

(10.14%)

$3.06-$15.86

Sonic (Nasdaq: SONC  )

$14.76

***

(10.60%)

$14.40-$26.19

Apollo Group (Nasdaq: APOL  )

$49.05

***

(7.16%)

$37.92-$81.68

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 here. Today isn't one of those days.

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 110,000-person-strong Motley Fool CAPS community of stock pickers speaks with a poor rating or a negative pitch. You should listen, too.

Thus, here is today's list of the worst stocks in the world.

Worse
We begin with Rockwell Automation, which reduced guidance. Management had projected between $4.25 and $4.45 in per-share earnings for the year. No longer.

Rockwell CEO Keith Nosbusch told investors that "market growth is slowing in two key regions," Forbes reports. I've no doubt that's true. What's troubling is that Rockwell had been on a great run. Return on invested capital has been rising steadily since 2001.

Wait for insiders to buy before betting on a turnaround here. They've dumped more than $10 million in shares since last June.

Worser
Next up is American Greetings, which reported a 56% decline in its fiscal first-quarter earnings. But you wouldn't know that from the comments CEO Zev Weiss made in a company statement: "I am pleased with our revenue performance, particularly given current economic conditions. Our point of sale performance is encouraging."

Revenue was up a breathtaking 2%. (My apologies for the sarcasm.)

CAPS investors have been expecting trouble like this. All-Star BiLoandWise wrote in May that American Greetings is a "long-term loser." And investor BalmInGilead said in December that "the greeting card will go the way of the telephone booth."

You can't question those calls so far.

Worst
But our winner is Monaco Coach, which fell 10% on high fuel prices and weak discretionary spending, the Associated Press is reporting.

Probably true. Gas now averages better than $4 per gallon across the country, and Monaco's 2009 LaPalma features a 75-gallon tank. That's at least $300 per fill-up for a monster that -- historically, at least -- doesn't average much more than 7 miles per gallon.

CAPS investor Seanonymous adds further perspective in this pitch from April:

I think it is too soon for a turnaround. I imagine people selling their big RVs for smaller ones and causing an over saturated market of new and used mobile homes that people don't want or can't afford. Short term this stock is bound to continue down through most of 2008.

Good points, all. Even Winnebago (NYSE: WGO  ) CEO Bob Olson says the market is too crowded and that a "discounting war" could break out. A price war? Now? That giant sucking sound you hear is shareholder equity being eaten by a vast and growing void.

Monaco Coach ... and Winnebago ... and Fleetwood Enterprises (NYSE: FLE  ) ... and, well, every other RV maker in the country right now -- Wednesday's worst stocks 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 contributor Tim Beyers, who is ranked 20,588 out of more than 110,000 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.

Tim didn't own shares in any of the companies mentioned in this article at the time of publication. The Motley Fool's disclosure policy thinks cooked spinach is the worst veggie in the world.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 673626, ~/Articles/ArticleHandler.aspx, 8/21/2014 10:23:40 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement