Bad days. We all have them; some of us deserve them. Here are five stocks whose naughty ways drew investors' scorn on Tuesday:
|
Company
|
Closing Price
|
CAPS Rating (out of 5)
|
Change
|
52-Week Range
|
|
Sonic Automotive (NYSE: SAH)
|
$8.39
|
*
|
(18.54%)
|
$7.82-$30.03
|
|
Worthington Industries (NYSE: WOR)
|
$16.98
|
**
|
(11.98%)
|
$13.51-$26.46
|
|
MCG Capital (Nasdaq: MCGC)
|
$3.39
|
***
|
(11.49%)
|
$3.19-$16.47
|
|
American Int'l (NYSE: AIG)
|
$20.64
|
**
|
(8.47%)
|
$19.73-$70.13
|
|
Office Depot (NYSE: ODP)
|
$5.75
|
**
|
(9.16%)
|
$5.68-$30.17
|
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 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.
Worse
We begin with Worthington Industries, which yesterday joined Zions Bancorp (Nasdaq: ZION) on the "conviction sell" list held by broker Goldman Sachs (NYSE: GS). At least Goldman isn't holding back, eh?
Perhaps. What's troubling to me is that CAPS investors -- who, as a group, seem to think that Worthington possesses strong leadership -- agree with Goldman that the company is in the right market at the wrong time. "Great company but commodity market is in a freefall in world wide panic," wrote All-Star Tastylunch in January. Not much has changed since.
Worser
Next up is MCG Capital, which didn't suffer from any particularly bad news. But this stock seems destined to disappoint; its 28.2% dividend yield looks too good to be true.
According to Yahoo! Finance, its expected dividend payment -- $1.08 per share -- is equal to 189% of its expected earnings. What's more, at 28%, MCG's yield is more than twice its five-year average of 10.6%.
All stocks -- and markets -- have a way of reverting to the mean. Expect that to be true with MCG, as well.
Worst
But our winner is Sonic Automotive, a national auto retailer that cut its outlook because of worsening economic conditions.
"The Company now expects that its diluted earnings per share from continuing operations for the year will be in the range of $1.65 to $1.85," reads the press release. "This lower earnings target is primarily a reflection of the difficult market for all segments of our business."
Sonic isn't alone. Dollar Thrifty Automotive Group recently cut its estimates for the second time. Consumers, rightly, are tired of $4 gas -- I'm not at all surprised that they're choosing not to pay for the right to consume more of it.
Sonic Automotive and its gas-guzzling business model ... Tuesday'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.
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