Today's 3 Worst Stocks in the S&P 500

Earnings season was an era to forget for the three worst companies in the stock market today.

Jan 22, 2014 at 7:04PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

With little to go on apart from a smattering of earnings releases, the stock market edged only slightly higher today. Investors will keep a close eye on jobless claims numbers, manufacturing data, and December existing home sales when tomorrow rolls around, but today it was earnings, earnings, earnings. This was an unfortunate point of emphasis for the day's three biggest laggards, each of which readily supplied underwhelming financial data to the public. The S&P 500 Index (SNPINDEX:^GSPC) added 1 point, or about 0.1%, to end at 1,844 today. 

Coach's (NYSE:COH) quarterly results -- which sent the stock down 6% today -- frankly, are painful to even write about. The luxury retailer posted lackluster sales over the holidays, most notably in the North American market. Now, of course there are other markets in the world, but North America is a pretty key area economically speaking; in this key market, Coach saw same-store sales fall a precipitous 13.6%. My colleagues Mark Reeth and Michael Olsen highlighted a few important takeaways from the holiday quarter and explain why you may want to be cautious "buying on the dip" here. 

Not to be outdone, Motorola Solutions (NYSE:MSI) stock tumbled 3.9% Wednesday after reporting fourth-quarter results that beat both sales and earnings estimates. How did Motorola Solutions, the renowned maker of walkie-talkies and other durable tech products, manage to slump after beating expectations? Simple. The company's future projections were absolutely abysmal. While Bloomberg estimates called for per-share earnings of $0.77 in the first quarter of 2014, Motorola Solutions blindsided analysts with a lowball forecast of $0.46-$0.52 for the period. Yikes. 

Finally, tech mainstay IBM (NYSE:IBM) lost ground Wednesday, shedding 3.3% after missing its sales mark for the fourth quarter. Although it doesn't quite make sense to be lambasting IBM for subpar revenue when its profit actually exceeded forecasts, the sudden drop in hardware sales spooked investors. Revenue in that division fell 26% in the fourth quarter, and sales in China, of all places, slumped nearly as much, so there are some concerns to watch for. But IBM is still a behemoth in its industry and a wildly profitable company, so today's knee-jerk reaction could just be overblown.

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Fool contributor John Divine has no position in any stocks mentioned. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.

The Motley Fool recommends Coach and owns shares of Coach and IBM. 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.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.

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