These 5 Stocks Are Losers

A lot can happen in four years. Michael Phelps is apparently faster. Misty May-Treanor and Kerri Walsh can still bring it on the sandy volleyball court. But other athletes haven't been as fortunate.

The same can be said for some companies.

In honor of this month's Olympic Games in Beijing, I decided to take a look at some of the prolific stocks that have collapsed over the past four years. I went back to Aug. 13, 2004 -- the day of the opening ceremonies in Greece -- and checked on how many of the most widely held stocks at the time performed through this month's opening ceremony.

Despite the recent market weakness, stocks haven't been too bad of a bet between the Olympian events. The S&P 500 has actually inched 21.7% higher between the 2004 and 2008 opening ceremonies, and that's without the gradual flow of dividends trickling in.

So what are a few of the big name stocks that have not only failed to keep pace with the market, but have also posted overall declines in that time? Here are a few that really stood out in stinking up the place.

Company

8/13/04

8/8/08

Change

Starbucks (Nasdaq: SBUX  )

$21.59

$15.12

(30%)

Home Depot (NYSE: HD  )

$33.14

$26.37

(20.4%)

Yahoo! (Nasdaq: YHOO  )

$27.49

$19.90

(27.6%)

Sirius XM Radio (Nasdaq: SIRI  )

$2.18

$1.32

(39.4%)

Dell Computer (Nasdaq: DELL  )

$34.51

$25.00

(27.6%)

* Starbucks is adjusted after a 2-for-1 stock split in 2005.

Disqualified after false starts
Where did these seemingly popular investments lead their shareholders astray? Every stock athlete has a unique story to tell.

The rise and fall of Starbucks is legendary by now. Aggressive expansion, a growing number of premium coffee alternatives, and ill-advised forays into aroma-crushing breakfast sandwiches and brand-diluting music find the company closing stores and dreaming up new ways to win back customers. Starbucks was once the quintessential growth stock, but it's hard to stay that way when earnings and comps are falling.

Home Depot had a good thing going when the housing boom was humming along. It was even widely believed that the hardware superstore chain could withstand a real estate hit, because folks would simply renovate their homes. The problem is that when home prices began to crater, the ability of homeowners to tap disintegrating equity in their homes to bankroll the remodeling projects dried up. Tighter lending practices simply made an already bad situation even worse. Leadership concerns also plagued the company, but former CEO Bob Nardelli also walked in when the stock was ridiculously pricey, with a very difficult set of circumstances looming around the corner.

Yahoo! wouldn't have made this list if it had signed off on the Microhoo deal earlier this year, but that rearview mirror is cracked now. The online portal simply failed in making the most of its time at the top. It yielded market share to Google (Nasdaq: GOOG  ) , a company that went public during the 2004 Olympic Games. It fumbled a leadership transition at the top, hiring internally last year when a fresh outsider was necessary. The upside here is that Yahoo! is still profitable, still growing, and refreshingly rich in strategic investments in Asia. The market doesn't want to hear about that now, but it may help out between now and the 2012 Olympics -- if the Microhoo monster doesn't rear its head again.  

Sirius has always been one of the most actively traded stocks, in part because of its low share price. Just a few weeks after the 2004 Olympics, shares of Sirius catapulted after it was announced that Howard Stern was bringing his popular morning radio show over to satellite radio. However, the magnetic appeal of Stern and the successful merger with XM haven't been enough to win over investors who see billions in accumulated deficits, pesky debt, and a rough road to profitability. I'm a fan of Sirius, but the value meal share price proves that I'm in the minority.

Dell is our fifth loser. The company can't blame its niche. Rival Hewlett-Packard (NYSE: HPQ  ) has actually seen its shares nearly triple between the opening ceremonies. However, HP's gains have come mostly in appreciation of its once depressed margin levels. Selling PCs and laptops is still a tricky industry these days if you don't have apple logos on your boxes, and Dell's competitors have gotten smarter. The company isn't taking the challenges lying down, but it's taking steps to matter again in Wall Street's eyes.

Next stop: 2012
Instead of dwelling on the negatives that befell these five Wall Street giants over the past four years, let's talk about what it will take to turn these companies around.

Which of these five stocks do you think will beat the other four -- in terms of market returns -- between now and the 2012 opening ceremonies in London? Chime in on the comment box at the bottom of this page, and I'll be back next week to discuss some of your thoughts.

And just so you don't think that I'm a glutton for punishment, come back tomorrow when I will get into some of the prolific companies that have generated great returns over the past four years.

Play on!

Other ways to stamp your passport:

Starbucks, Home Depot, and Dell are Motley Fool Inside Value recommendations. Google is a Motley Fool Rule Breakers selection. Starbucks is a Motley Fool Stock Advisor pick. The Fool owns shares of Starbucks. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz has never won a gold medal. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.


Read/Post Comments (8) | Recommend This Article (1)

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 August 21, 2008, at 2:15 PM, dcrednek wrote:

    One of the most unhelpful and pointless articles I've seen in a long time here on TMF. What's the point of this one? THOUSANDS of issues have been losers over the past four years. Your criticism of HD is a bit lopsided given your complete disregard of the fact that it and LOW have grabbed massive market share in the home improvement industry. SBUX has lost some of its shine since falling away from the original business plan, but give credit to the brand its built; that sort of thing is not easily replicated. How about being a bit more analytical and a bit less sensationalist on your next try?

  • Report this Comment On August 21, 2008, at 2:20 PM, J56D wrote:

    I don't understand why you feel that you have to bash Sirius with every article you write. Use a little imagination and I'm sure that you can come up with a different stock or subject for your articles. Until then it seems that you are nothing but a shill for Goldman Sachs.

  • Report this Comment On August 21, 2008, at 3:32 PM, Skysclear wrote:

    Motley Fool.. Is a much as a "Loser" as

    it calls another stock.. For REAL People,

    With REAL losses are subjected to this kind of display of attacks on their stock.

    If you have no respect for the stocks you so easily bash.. you have no respect for the people that own them.

    Think about THAT .. and I would like your

    Advertisers to think about THAT too!

  • Report this Comment On August 21, 2008, at 8:33 PM, ssgaj wrote:

    What is your problem? With all the stocks out there to talk about you spend most of your time bashing Sirius. What are your ties to the Nab? This will be the last time I visit your sorry site. You folks are lame.

  • Report this Comment On August 21, 2008, at 10:08 PM, Fredlee009 wrote:

    Ya, this site is in bed with the shorts obviously, in my very humble opinion only. They have been mentioning this stock in "unrelated articles" for months. This guy likes the stock, well, sure he does, after he bashes it with immature commentary, dumb analysis, and events that took place now 4 years ago. Nice Olympic tie in so we think thats why he goin that far back. Those other stocks are also heavy shorts. Dont know much about those, but I know bad journalism when I read it.

  • Report this Comment On August 22, 2008, at 1:36 AM, LivestrongerNYC wrote:

    Sirius XM should beat the other 3 by far. People are not looking at the potential for this company. They have done relatively no advertising this year due to waiting out the merger. They have almost 18 million customers already and great leadership. Auto sales are falling, but a high % still get sat. radios. Now this company has leverage to deal with NFL, NBA, etc. as there is not a choice between 2. It's only in sports best interest to be broadcast over a larger network. Now 18 million is nothing in comparison to what can be tapped out there. Wait until they start tapping into the foreign markets. This is sat. radio, it can reach global. We are talking 100s of millions of potential customers. What about possible syergies with let's say apple (ipod), gps, recording from the sat. radio. The possibilities are tremendous and new and fresh content should be very available for reasonable costs.

  • Report this Comment On August 22, 2008, at 10:01 AM, motleydumbass wrote:

    You're completely right about Sirius being a losing stock. Thanks for advising me to buy it at $6.30 a share on the hype of Howard Stern signing on with Sirius. Whats really sad is people pay for your advise.

  • Report this Comment On August 22, 2008, at 10:24 AM, dstnewman wrote:

    Rick, ignore these people. People who do not learn from history are doomed to repeat it.

    That being said, I think the difference between Sirius and the other comapnies on your list is the fact that the majority of those companies were established companies, while Sirius was and still is an up and coming company.

    Sirius is the only company in the group that still has large percentage growth quarter after quarter. I think Sirius is on top 4 years from now. I was a buyer before stern and I am a buyer now.

Add your comment.

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: 711961, ~/Articles/ArticleHandler.aspx, 12/21/2014 3:44:44 AM

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