3 Warlock Stocks That Will Put a Spell On Your Tiger Blood

Charlie Sheen is a violently hating Warlock imbued with tiger blood. He's bi-winning, even when he's losing at least $16 million now that Warner Bros. has canceled production of the final eight episodes of Two and a Half Men, in which Sheen co-stars.

And now, the spectacle's gone interstellar, with Sirius XM Radio (Nasdaq: SIRI  ) broadcasting 24 full hours of Sheen-isms and antics over the weekend on a temporary channel called Tiger Blood Radio.

I can't blame Sirius for wanting to cash in while the cash is still there, but to me, old Chuck is just another fine example of wishful thinking at work. And eerily reminiscent of every stock spam email I've ever read. Pitches like this one:

"The management team at Resource Exchange of America Corp. has targeted a number of strong, but undervalued, asset recovery firms ... Negotiations are already under way -- this team knows that it's the perfect time to act on Buffett's wise words," wrote one stock promoter in its email come-on.

Now compare that to Sheen describing to ABC News what goes on daily at the mansion he calls "Sober Valley Lodge," where lives with two women he calls his goddesses: "It's clean. There's cleansing, there's healing here. There's laughter, there's children, there's beautiful women and perfect food. We just win."

Can't win for losing
Let this be a lesson to you, Fool. When CEOs or stock pitchers tell you their company is winning, they're probably losing. In the case of Resources Exchange, the touters were spouting off last August when the stock traded for $0.57 a share. Today, it trades for $0.08.

Winning! Or not.

Interestingly, Sheen has a personal connection to (ahem) losing penny stocks. His new best friend is bankrupt trader and former Major League Baseball pro Lenny Dykstra, who once had a stock-picking column at TheStreet.com. Here are three more Dykstra-worthy stocks that Fools and Warlocks alike should avoid.

1. National Pharmaceuticals
What's being pitched
: "The company has embarked into the business of licensing mid stage development drugs for further development and marketing worldwide," reads the sponsored pitch sent to our TMFStockSpam account.

Reality: Not only is National Pharma's website light on specifics, but a marketing outfit called IAB Media also recently paid $30,000 cash for a one-day campaign executed by professional stock touter Epic Stock Picks. CEO Elaine Affleck, though already CFO of Braz Diamond Mining, was named to National Pharma's top job in December. You also won't find any filings with the SEC.

Losing!

2. Viaspace
What's being pitched: "[Viaspace] is a clean energy company providing products and technology for renewable and alternative energy, most notably, Giant King™ Grass ... Giant King™ Grass is a fast growing, high yield, hybrid grass that is neither genetically modified nor invasive. It grows in a variety of soil conditions and does not compete with food crops," reads the sponsored pitch sent by ShamrockStocks to TMFStockSpam.

Reality: Though by all appearances a legit business, the company had burned through more than $600,000 in cash during the first nine months of 2010. In this sense, the spam seems aimed at raising cash that, unlike Giant King Grass, the company can't grow organically.

Losing!

3. American Jianye Greentech Holdings
What's being pitched
: "The company's alcohol-based fuels burn with higher efficiency and significantly lower toxic waste emissions than unleaded gasoline," reads the sponsored pitch sent to TMFStockSpam.

Reality: Located in Harbin City, China, the company changed its name from Gateway Certifications in November 2009 after a reverse merger. And what did Gateway do? It certified that minority-owned businesses here in the U.S. are, in fact, minority-owned. No wonder a third-party called Unise Investment Corp. paid $25,000 to SteroidStocks to pump this sucker. No one would pay attention otherwise.

Losing!

A better way to win
These stocks are on a drug. It's called "wishful thinking," and it's readily available. But if you take it, your retirement will melt away and your spouse and children will weep over your exploded portfolio.

So let's not go there. Instead, here are four reasonably priced, high-rated businesses from related industries. Each has a paid a high-yielding dividend for at least five years, while also increasing that payout by 5% or more annually:

Company

Dividend Yield

5-Year Dividend Growth

Eli Lilly (NYSE: LLY  ) 5.7% 5.2%
GlaxoSmithKline (NYSE: GSK  ) 5.6% 8.1%
Magellan Midstream Partners (NYSE: MMP  ) 5.1% 7.5%
Enterprise Products Partners (NYSE: EPD  ) 5.4% 6.4%

Source: Capital IQ, a division of Standard & Poor's.

Look enticing? They should. High-yielding stocks have a history of beating not only their lower-yielding peers, but also the broader market, and they do so without the same stomach-churning volatility that's common to penny stocks.

Or in terms Sheen might appreciate: Less risk, more winning. No tiger blood required.

But don't just take my word for it. Use My Watchlist, our free, personalized stock tracking service, to keep tabs on all the companies mentioned here.

GlaxoSmithKline is a Motley Fool Global Gains pick. Enterprise Products Partners and Magellan Midstream Partners are Motley Fool Income Investor recommendations. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team, which is, indeed, winning in its battle with Mr. Market. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool owns shares of GlaxoSmithKline. The Fool is also on Twitter as @TheMotleyFool. Its disclosure policy is tired of pretending it's not special.


Read/Post Comments (9) | Recommend This Article (7)

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 March 07, 2011, at 4:22 PM, rab6793 wrote:

    So did this article really had ANYTHING to do with SIRI?

    Answer = NO.

    But hey, it gave you hits right? tsk tsk

  • Report this Comment On March 07, 2011, at 4:36 PM, TMFMileHigh wrote:

    @rab6793,

    Did it? Color me doubtful, except in the cases of those who clicked through expecting an attack on SIRI only to end up disappointed. I still like the stock:

    http://www.fool.com/investing/general/2010/10/25/the-big-mon...

    But let's assume you're right. Sirius XM's attempt at a get-rich-quick play based on the Sheen meltdown is perfectly appropriate for a story about Sheen's own connections to the (ahem) get rich quick schemes we call penny stocks.

    In short: I don't accept your premise.

    Thanks for reading and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On March 07, 2011, at 6:06 PM, rab6793 wrote:

    Hmm get rich quick scheme? how so?

    Did your research suggest that SIRI would generate NEW revenue from potential customers that were on the fence about joining, but now, since its about hearing all the ins and outs of charlie sheen's "life" for a day or two, they would be willing to pay??

    Xiriously??

    If that's not the case, then i fail to see your point. :s

    Maybe try again?

    But hey, i feel somewhat better, because you still "like " the stock! :)

  • Report this Comment On March 07, 2011, at 6:15 PM, TMFMileHigh wrote:

    @rab6793,

    >>Hmm get rich quick scheme? how so?

    One day of all Sheen before the hysteria ends. That's the very definition of the opportunism common to get rich quick schemes.

    Thanks for writing and Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On March 07, 2011, at 6:19 PM, rab6793 wrote:

    @Tim.

    You still dd not mention how they are going to make money on this??

    Am actually very interested in knowing what you came up with.

  • Report this Comment On March 07, 2011, at 6:50 PM, TMFMileHigh wrote:

    @rab6793,

    Rick does a better job of pointing out the long tail benefits of these sorts of quick-turnaround schemes:

    http://www.fool.com/investing/general/2011/03/04/sirius-xm-p...

    Foolish best,

    Tim (TMFMileHigh and @milehighfool on Twitter)

  • Report this Comment On March 07, 2011, at 8:31 PM, Jordan1035 wrote:

    Click below for the real warlock offended by Charlie Sheen

    http://tinyurl.com/4qz9tyt

  • Report this Comment On March 08, 2011, at 7:16 AM, rab6793 wrote:

    @Tim

    Np.

    What is your position with SIRI? Do you own or short the stock??

  • Report this Comment On March 08, 2011, at 8:35 AM, TMFMileHigh wrote:

    @rab6793,

    No real-money position in SIRI at the moment. I'm long in CAPS. You can find all my portfolio holdings here:

    http://my.fool.com/profile/TMFMileHigh/activity.aspx

    Thanks again for writing,

    Tim (TMFMileHigh and @milehighfool on Twitter)

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