Tuesday'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 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.

Fool.com contributor Tim Beyers, who is ranked 20,974 out of more than 110,000 participants in CAPS, also writes for Motley Fool 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 that cooked spinach is the worst veggie in the world, and it isn't too keen on parsnips either.


Read/Post Comments (1) | Recommend This Article (4)

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.

  • Report this Comment On July 23, 2008, at 5:28 PM, kmgarrison wrote:

    I just did the math and if you went out and bought all of these stocks directly after reading the article, just one week ago, your average return as of today would be 25.87%.

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Related Tickers

11/26/2014 4:10 PM
SAH $25.75 Down -0.17 +0.00%
Sonic Automotive,… CAPS Rating: ***
AIG $54.61 Down -0.07 +0.00%
American Internati… CAPS Rating: ****
GS $188.52 Down -0.34 +0.00%
Goldman Sachs CAPS Rating: ****
MCGC $3.70 Down +0.00 +0.00%
MCG Capital Corp CAPS Rating: **
ODP $6.63 Down -0.01 +0.00%
Office Depot CAPS Rating: *
WOR $38.48 Down -0.09 +0.00%
Worthington Indust… CAPS Rating: ****
ZION $28.89 Down -0.13 +0.00%
Zions Bancorporati… CAPS Rating: ***

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