3 Companies That Will Destroy Investors' Wealth

The following video is part of our "Motley Fool Conversations" series, in which consumer-goods editor and analyst Austin Smith discusses topics around the investing world.

In today's edition, Austin talks about three companies that are only destroying wealth for investors. Their track records should have investors running scared, but many people are still bullish on them. One is an online company that will be run over by an upcoming IPO, another is a restaurant chain that can't seem to find its mojo, and the last is a long-shot smokeless-tobacco company that's betting the farm on a one-in-a million payoff. Investors beware!

As great as these companies are at losing you money, our analysts have uncovered 11 that only seem to make investors wealth. They're high-yielding bulletproof dividends that consistently reward their shareholders. If you care about your long-term wealth, be sure to read our report: "Secure Your Future With 11 Rock-Solid Dividend Stocks." You can access your complimentary copy today at no cost! Just click here to discover the winners we've picked.

Austin Smith has no positions in the stocks mentioned above. The Motley Fool owns shares of Altria Group and Panera Bread. Motley Fool newsletter services recommend Panera Bread. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (14) | Recommend This Article (13)

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 February 25, 2012, at 1:54 PM, thefamilyman wrote:

    JB is right on the money! CIGX stock price has almost doubled in about a month and the "Fool" has been publishing negative articles about CIGX for months. Obviously the "Fools" have no idea how to pick stocks. I wonder what they will be saying in couple of months when the stock price has doubled again?

  • Report this Comment On February 25, 2012, at 3:46 PM, tommsel1 wrote:

    Ok Austin. You look like you just graduated out of college. i am having real issues with Motley Fool . One a analyst posts positive piece on Star yesterday. Now you come along and slam it . Really. How does that work in your company? You do realize Star is about to negotiate a settlememnt with RJR on a patent infringment suit thats been in the courts for 10 years now. They have a valid patent and will be negotoiating this very soon for a boatlaod of cash and royalties . I suggest you go back to school and try to learn something else other than giving your opinion on stocks. Why don't you try Amway. Or better try RJR . The may be hiring . LOL. Can you guys explain this realistically. No you cannot.

  • Report this Comment On February 25, 2012, at 6:22 PM, PKCIvestments wrote:

    I'm beginning to think, who's the bigger Fool? The Fool or the person following the Fool?

    Where have I heard this before?

    It seems every tip from MF is just a way to pitch their offer to sell you the information in one of their publications?

    I'm extremely new to all this and I fear I have already drowned but don't relize it yet.

  • Report this Comment On February 25, 2012, at 10:01 PM, TMFBWItime wrote:

    To those who have claimed I am a short candidate on Star Scientific, you can view my holdings, including any short positions here: http://my.fool.com/profile/TMFBWItime/info.aspx

    @thefamilyman

    i've noticed you've been a regular commentor on the Star Scientific feeds. In fact, it's the only stock you write on. If you held shares over the past month, congratulations! You've collected a nice return, and that is what makes us happiest. To your point about The Motley Fool not knowing how to pick stocks, have you seen the return of our Stock Advisor service?

    @tommsel1

    One of the corner stones of Motley investing is welcoming a breadth of investing thesis and ideas. We certainly don't always agree around the office, but encourage people to present their best bull and bear cases for the general investing public so that you are empowered with all of the information to make the decision you feel most confident in.

  • Report this Comment On February 26, 2012, at 12:14 AM, naiachamp wrote:

    I'm up 54% on CIGX- to say that it's one of 3 companies that will destroy wealth is a bit harsh.

  • Report this Comment On February 26, 2012, at 11:46 AM, seriously101 wrote:

    So I watched the video and while its not as bad as some people state I think you are missing the point with Star. If you are comparing them to other smokeless tobacco co's you are way off the mark. Anatabloc has nothing to do with smoking cesation and everything to do with the reduction of inflamation in the body. And as we all know from reading about inflamation today it is now believed to be the cause of just about every human disease. Along comes Anatabloc whether discovered by accident or not and it reduces inflamation in the body dramaticaly without the side effects of drugs being marketed today. Have you heard the disclaimers following the drugs advertised on tv, I wouldn't want to take them. I have used and am using Anatabloc with amazing results. People around me have tried it with just as amazing results as I have had. The product works and they have just scratched the surface with the possibilities. Is the stock speculative at this point? Absolutely. Can they stumble? Absolutely. My guess is they wont and my guess is sales of the product will take off substantialy in the coming months and years. A settlement with RJR is possible and would be the icing on the cake. But for me the real story here is Anatabloc and the potential it holds. Well worth the risk in a diversified portfolio. Star has put together a great team who I have no doubt will take this company where it deserves to go. I would suggest you research the results of Anatabloc or better yet try it for yourself. Once you try it and see the results I imagine you will have a better understanding of the potential here. Big shout out to Mr.Williams and Mr. Dean at Star Scientific.Keep the faith.

  • Report this Comment On February 26, 2012, at 7:52 PM, istockyou wrote:

    The irony here is that every time I hear something negative about this stock - I buy more and keep making more money.

    Fool is the appropriate term for this writer.

  • Report this Comment On February 27, 2012, at 7:33 AM, TMFBWItime wrote:

    @seriously101

    I appreciate your measured and well thought out response. I have researched Anatabloc, as well as the pending settlement with RJR. My concern with Anatabloc is the quantity they will have to sell to dig themselves out of their current financial doldrums. Though I am glad to hear you are using the product with great results, the speculative nature of the stock you mentioned is exactly what is keeping me away. I never invest on the promise of wonder drugs, and recommend others take a cautionary approach when looking at this stock.

    Foolish best!

  • Report this Comment On February 27, 2012, at 8:07 AM, seriously101 wrote:

    Thank you for responding. The tone of your reply is more of what your video should feel like. In my opinion if you wnat to be taken seriously you need to stop sensationalizing. There is nothing wrong with having speculative stocks in a diversified portfolio. Just look at vvus last week. I have tried many a supplement over the years as well as prescription drugs for what ails me. I have never had such positive results from any of them the way I have with Anatabloc without any side effects. I stronly believe you are underestimating the huge sales potential of this product.

  • Report this Comment On February 27, 2012, at 11:23 AM, daleleach wrote:

    Learn to put your mic on the shirt and not the jacket ... especially if you use hand gestures. People might take you more seriously without the mic noise. CIGX will be over $5.00 soon based on all the positive news to come. It is a speculative stock with potential to give investors spectacular results. Austin's age is his blindfold that does allow him to see the whole picture here.

  • Report this Comment On February 27, 2012, at 10:49 PM, Fitzzz wrote:

    Austin, 1. Check out anatabloc on You Tube.

    2. Insider transactions

    3. How much do you think RJR owes Star

    a pack over 10 yrs?

    4. This product does not require a script.

    Their is a lot of inflammation in this world. We all

    have it. look up inflammation and dream like the

    rest of us old Fool's. Dream Big!

  • Report this Comment On March 02, 2012, at 1:04 PM, StarGazer123 wrote:

    Many of you on here have already tried to straighten this guy out. Good comments posted already.

    One thing to keep in mind. Celebrex is a $2 billion annual sales drug for Pfizer. Anatabloc has proven to be 4X more effective in maintaining inflammation than Celebrex. Anatabloc just hit retail Aug 31 and has been growing in sales month over month. It's not a drug and because it's a nutraceutical they can not claim benefits because it hasn't gone through the FDA drug testing. Therefore you will not see a huge ad campaign for Anatabloc like you do Celebrex. That does not mean this product is not effective. It just means it will play out as a word of mouth campaign.

    The facebook page for Anatabloc has many many stories from people taking the product that have had great results. The more people that hear about this product the faster the sales volume will grow. The fact that GNC just put it in their on line store is also a good sign. It's quickly moving up on their list as a top seller. I expect this will be in their store fronts next which I believe they have over 1700 rooftops.

    It's going to take time so don't give up on this stock. I've been on it for 2 years now and I'm up over 125%. I think this stock will hit $20 before the end of the year as news on RJR and other tobacco company settlements come in.

    We will also have news from the Roskamp Instit later this year on their testing results with regards to Alzheimer's. There are over 3 million Americans that have Alzheimer's. If this news has positive results, no telling where this stock will go. The US Govt has made Alzheimer's a focus because they forecast over 13 million Americans will suffer from this disease by 2050. The strain on the already over stretched medicare expenditures will bankrupt the program. Anatabloc has huge upside potential if this nutraceutical is found to be effective in managing Alzheimer's disease. This is only one of many inflammatory diseases Anatabloc has shown signs it can manage.

    It's definitely worth the speculation. Nuke John on Seeking Alpha had CigX picked as his #1 stock for 2012 and a potential 10 bagger. Here's an analyst that did some homework. You may want to look up his article and read it.

  • Report this Comment On March 02, 2012, at 2:14 PM, thefamilyman wrote:

    Thank you for the response! I found out about CIGX from Patrick Cox and bought shares when it dropped last August. I first tried Anatabloc when it became available at the end of August and it worked! That prompted me to more DD and I found the message boards, including this one. Now I have accumulated a much larger position. While this is not my only investment, it is the largest. You are correct that this is the only stock I track on the message boards - not enough time...

    It is frustrating that an "amateur" like myself is apparently more informed than any of the writers that the Fool has employed to write on this company. One of your counterparts even used the obviously uninformed rantings of a CAPS poster in her article. I am fortunate that I have been able to do substantial DD on Cigx. Otherwise, I would be tempted to assume that the Fool's writers on this AND other stocks actually know what they are talking about.

    Question - Are you by any chance one of the researchers for The Motley Fool's Stock Advisor service you mentioned?

  • Report this Comment On July 05, 2012, at 6:20 PM, majorscratch wrote:

    Move your mic up it annoying :)

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