Should You Buy These 5 Losing Brands?

Woolworth, Pan Am, S&H Green Stamps. These were all brands that were once wildly popular and broadly loved but today no longer exist. At some point, their value began to diminish after years of lifting the companies higher, until at last they disappeared.

Of the 100 brands on Interbrand's list of the top 100 global brands, 25 of them slid in value from the year before. That doesn't mean they're going to disappear on us -- Anheuser-Busch InBev's Budweiser brand, for example, lost just 3% of its value from the 2011 survey, though the $11.8 billion alcoholic beverage behemoth isn't going anywhere -- but all falls from grace start somewhere. Although the boneyard might not be their fate, they might not be good investments, either.

The biggest loser on the list is Research In Motion's (Nasdaq: RIMM  ) BlackBerry, which tumbled 39% from last year, putting it at No. 93 on the list. That it occurred as Apple (Nasdaq: AAPL  ) made the biggest gain year over year, soaring 129% into the No. 2 spot behind Coca-Cola, which suggests there may be more problems in store for RIM. Similarly, Nokia (NYSE: NOK  ) lost 16% of its value from the 2011 survey.

Here are the six worst-performing brands in the 2012 Interbrand Top Global Brand survey.

Brand

2012 Rank

2011 Rank

Brand Value Change

BlackBerry

93

56

(39%)

Goldman Sachs (NYSE: GS  )

48

38

(16%)

Nokia

19

14

(16%)

Yahoo! (Nasdaq: YHOO  )

97

76

(13%)

Moet & Chandon

98

77

(13%)

Source: Interbrand.

Hanging up on growth
Research In Motion's BlackBerry seems to be in every bit of trouble as its dramatic decline would indicate. With the iPhone and the Galaxy series from Samsung (No. 9 on the list) ascendant, the Canadian smartphone maker is betting its resurrection on the new BB10 operating system due out early next year. It's gone from epitomizing the smartphone industry to tenuously clinging to life. Nokia is in a similar boat -- it needs to have its new Windows Phone be a commercial success, though its patent portfolio might be the real source of its future succor.

Not all that glitters is Goldman
Goldman Sachs has a credibility problem these days, and though some analysts think the investment house may be "built to win," some smart Fools do think such bullish sentiments gloss over a lot of the deeper problems assailing it. Still, there remains the opportunity to profit off its discounted value.

Portal peril
Like RIM, Yahoo! defined the dawn of its industry but has since watched the world pass it by. From search to email, data sharing to content, the Internet portal has become a perennial also-ran and watched its revenue base dwindle away. There are plenty of office pools betting on the date of its ultimate demise. Although it has come back several times over the years, it seems likely it will end up being a brand inside some other brand one day.

Aspiring to more
Last would be bubbly maker Moet & Chandon, perhaps a victim of the recession as a brand that exemplifies luxury. Although I think its parent company LVMH-Moet Hennessy Louis Vuitton can survive and thrive based on the diversity of its luxury brands, certain segments may feel the pinch.

I find Research In Motion and Yahoo! to be the brands most at risk for falling off the survey completely and out of portfolios for good. They each have a chance to rebound, but should the Hail Mary play miss, I fear the worst for them.

I've rated both stocks to underperform the market indexes on the 180,000-member-driven Motley Fool CAPS service based on the belief that even if they don't go under, there's not enough substance to overtake their respective industry leaders. It's also a means of holding myself accountable to you, the reader, for the CAPScalls I make here.

Branding iron
Yet just because I've poked a thumb in their eye and their brands have been losing their grip on value, that doesn't mean you might not have compelling reasons they'll come through to the other side. Let me know in the comments box below why you think Research In Motion or Yahoo! can redefine their industries once again.

The iPhone has pushed Apple forward as such a valuable brand, and one has to wonder how much higher it will rise next year now that the iPhone 5 has been introduced. Now there's a new premium report on Apple from The Motley Fool detailing the opportunities and challenges in store for its shareholders and investors. The report includes a full year of updates, so click here to get started.

Fool contributor Rich Duprey owns shares of Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Apple and Coca-Cola. Motley Fool newsletter services have recommended buying shares of Apple, Coca-Cola, and Goldman Sachs and creating a bull call spread position in Apple. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


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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 October 08, 2012, at 8:12 PM, llIlllIlllIlllIl wrote:

    Maybe Microsoft and Nokia can resurrect the BlackBerry name once the carcass is ripe for pillaging.

    And good to see Nokia is still high up there, well done all things considered!!

  • Report this Comment On October 10, 2012, at 12:53 PM, truman1987 wrote:

    I've been buying Yahoo. They still make money, not overvalued at a PE of 18, and Price/Book of 1.5 with some making a case that book value should be much higher. They have a great deal of cash and made some very good bets on Chinese Alibaba and Yahoo Japan. They just hired a new CEO from Google who values product development again and she has a track record of success to back it up. My bet is that even if she fails the company's value won't be signficantly less than it is now. If she succeeds and develops some products that catch fire, the stock will fly. Lots of upside, very little downside risk.

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