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2-Star Stocks Poised to Plunge: Motorola?

By Brian D. Pacampara | More Articles
January 29, 2009 | Comments (2)

Based on the aggregated intelligence of 125,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, mobile handset maker Motorola (NYSE: MOT  ) has received a distressing two-star ranking.

With that in mind, let's take a closer look at Motorola's business, and see what CAPS investors are saying about the stock right now.

Motorola facts

Headquarters (founded)

Schaumburg, Ill. (1928)

Market Cap

$11.17 billion

Industry

Communications equipment

TTM Revenue

$32.66 billion

Management

Co-CEO Gregory Brown
Co-CEO Dr. Sanjay Jha

Return on Equity (average, last five years and TTM)

13.1% and (3.2%)

Competitors

Nokia (NYSE: NOK  )
Research In Motion (Nasdaq: RIMM  )

CAPS members bearish on MOT also bearish on

Dell (Nasdaq: DELL  )
Citigroup (NYSE: C  )

CAPS members bullish on MOT also bullish on

Apple (Nasdaq: AAPL  )
Cisco Systems (Nasdaq: CSCO  )

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 125 of the 400 All-Star members who have rated Motorola -- some 31% -- believe the stock will underperform the S&P 500 going forward. Among the bearish population are EnigmaDude and showme.

Two weeks ago, EnigmaDude explained why the stock is ready to get RAZR'd: "cutting the workforce, lowering estimates, doing all the right things (to drive down the share price)."

In a pitch from one day later, showme reminds us that Motorola's best days are behind it:

[Motorola] of the 50s, 60s and 70s was a wonderful company. Philip Fisher loved the company and the management. Unfortunately like Mr. Fisher they are gone and this company has been in a death spiral for over a decade. How many divisions and employees do they have left? They've been selling off and laying off since before the tech bubble. ... can't imagine getting bullish about it unless there has been some wonderful change in management, which has been changing about every 2 years for the last 12.

What do you think about Motorola, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 125,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Nokia and Dell are Motley Fool Inside Value picks. Apple is a selection of Stock Advisor. The Fool's disclosure policy always gets a perfect score.


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 January 29, 2009, at 11:39 AM, pondee619 wrote:

    For 1/29/09 the break down of stocks flat to positive for the past full year is:

    Five star 93

    Four star 105

    Three star 134

    Two star 173 and

    ONE star 222

    Can we please stop giving CAPS any weight in picking our holdings? I believe that the Fool is doing its readers a dis-service by touting this game as a useful tool in stock picking.

    I look forward to any constructive debate showing that my findings may be in error

    Almost twice the number of TWO star stocks had flat to positive returns over the past year than those "coveted" five star stocks.

  • Report this Comment On January 30, 2009, at 1:55 AM, smartphoneguy wrote:

    As if current Motorola management had not made enough dumb mistakes, the post-layoff moral was not already rock-bottom, on Wednesday senior management sent out a notice to all employees stating that - in the middle of one of the worst winters on record - they were canceling shuttle bus service to and from the commuter train station to the mobile phone HQ in God-forsaken Libertyville, IL, and to and from other Motorola locations . . . this 3 days before the entire Executive Staff is flying to the Superbowl on one of the company’s expensive corporate jets. The shuttle service was being canceled because “in these challenging macro-economic times” senior management was looking to look to make “prudent, proactive and realistic” financial decisions. How about selling a few jets and flying commercial? These clowns are running the business into the ground.

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