The Week's Biggest Stock Laggards

The week started out on a good note, after Federal Reserve Chairman Ben Bernanke cheered the market with his assurance that the Fed will continue to pump easy money into the U.S. economy. The optimism waned quickly, though, and the major U.S. indexes spent the next three days giving back some of Monday's gains. Why? Perhaps investors realized that Bernanke's assurance that the weak economy necessitated accommodative monetary policy underscored the fact that, well, we have a weak economy.

By the time the dust had settled on Friday, the Dow Jones Industrial Average (INDEX: ^DJI  ) had tacked on 1%, while the broader Russell 3000 rose 0.7%. But while the broad market was headed up, some stocks were headed down, fast.

The week's big losers
To outside observers, it certainly looks like it was a rough week for Kaydon investors -- after all, the stock finished last week at around $35 and closed out this week closer to $26. But if anything, shareholders are probably feeling richer this week, as the hefty drop in Kaydon's stock was due to a $10.50 special dividend the company paid during the week. Add that back to the current stock price, and investors are actually ahead for the week. And even better, they now have a good chunk of that value in cold, hard cash -- or, at least, cold, hard cash-representing digits in their online brokerage account.

On the other hand, the big drop in Swisher Hygiene's (Nasdaq: SWSH  ) stock was no mirage. The company announced on Wednesday that it's filing for an extension to submit its annual 10-K report to the SEC. Swisher is going through an internal review that has revealed there may have been accounting missteps in prior periods that could require a restatement of past quarterly reports. Swisher has an exciting story, as it's backed by some sharp executives with a good track record, but the financial results have been ugly, and this most recent revelation doesn't help one bit. My fellow Fool Robert Eberhard recently shared why he thinks it's time to put down the Swisher shares and slowly back away -- if you haven't already.

The 3 Worst-Performing Russell 3000 Companies

Company

Weekly Price Change

Kaydon (27.8%)
Swisher Hygiene (22.9%)
Saba Software (20.8%)

Source: S&P Capital IQ. Weekly price change is March 23-March 30. Includes only companies with market caps of $250 million or more.

Also among the week's worst performers were McMoRan Exploration (NYSE: MMR  ) and Neurocrine Biosciences (Nasdaq: NBIX  ) .

McMoRan watched its shares get drilled after the Gulf of Mexico energy-exploration company told investorsthere had been an equipment malfunction while testing its Davy Jones No. 1 well. The Davy Jones field is a particularly exciting prospect for McMoRan, and so it's not all that surprising that a hiccup there would spook investors. The still-recent memory of the BP (NYSE: BP  ) debacle could also have investors on edge. But did the past week's news really necessitate such a big drop in McMoRan's stock? My fellow Fool Brian Pacampara isn't so sure and thinks this could be a buying opportunity.

For Neurocrine Biosciences, the weekly drop came as the company reported lackluster results from trials of its treatment for tardive dyskinesia. Since the promise of riches for small pharmaceutical-company investors typically lies in the eventual approval of the company's key drug, it makes sense that shareholders would get spooked by less-than-stunning trial results. There is a "but" here, though -- the company said that at one of the testing sites, the testing protocol was not followed properly, and if it had been, the results probably would have looked a lot better. This still isn't exactly the story that investors want to hear, but it may be enough to soothe their nerves a bit until the next round of results.

At week's end, McMoRan and Neurocrine had both shed close to 14%.

That's it for the weekly laggards recap. Looking to turn the tides and find some strong outperformers in the year ahead? The Motley Fool has created a brand new free report titled "The Motley Fool's Top Stock for 2012." In it, my fellow Fools reveal a top pick that's poised for explosive growth ahead. Get instant access -- it's free.

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Fool contributor Matt Koppenheffer owns shares of BP but has no financial interest in any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter, @KoppTheFool, or on Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.


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