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

From materials to industrials to tech, today's 3 worst stocks span a variety of sectors.

Jan 29, 2014 at 7:14PM

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.

The stock market resumed its slide today, as gains from yesterday's small rebound were erased before the ringing of the opening bell. Ever since data showed Chinese manufacturing unexpectedly contracting last week, Wall Street's been hypersensitive to overseas developments. Currencies in emerging markets like Turkey, India, and South Africa have been losing value since then, causing problems for globally diversified investors. Not only does it make U.S. exports less attractive, but domestic companies will notice their foreign profits start to dwindle as conversion rates make the dollar more and more expensive. Embracing their fears, investors sent the S&P 500 Index (SNPINDEX:^GSPC) down 18 points, or 1%, to end at 1,774. 

But if you think the benchmark S&P 500 Index has been having problems over the past week, you haven't been paying attention to Yahoo! (NASDAQ:YHOO) stock, which cratered 8.7% Wednesday. Shares have now lost 13.2% in the last five trading days alone, far worse than the S&P's 3.8% hit over the same period. Today's sell-off was triggered by Yahoo!'s disappointing quarterly revenue figures, which the company reported yesterday. Not only did display ad sales post a 6% decline, but the sales growth of China's e-commerce giant Alibaba is cooling down, too. This is bad news for Yahoo!, which owns 24% of Alibaba, and still relies on Alibaba as an engine for growth. 

That old Wall Street adage that "investors buy the future, not the past" has never been truer than it was today with shares of Boeing (NYSE:BA), which shed 5.3%. Its profits surged by nearly 30% in the most recent quarter, as the aerospace behemoth set new delivery records for three different airplane models. But most large investors like consistency and some degree of predictability in a company's progression, so when Boeing said its earnings would grow by only about 2% this year, the stock tanked. The stock had a great year in 2013 and it can't keep growing at a 30% annual pace forever, so one of these days Boeing's multiple will come back down to earth -- I just don't want to be on board when it does.

Lastly, $35 billion Houston-based energy transportation company Kinder Morgan (NYSE:KMI) saw shares slump 3.9% Wednesday. The stock, like all others in the market today, was facing an uphill battle against fearful money managers as investors shifted their assets to lower-risk investments. But on top of that, Kinder Morgan stock started trading "ex-dividend" Wednesday, meaning anyone who owned a share yesterday could have sold today and still gotten the next quarterly dividend payment. Ex-dividend days give a downside bias to the stock for that day, since many short-term investors elect to sell their shares immediately and lock in that dividend. Longer-term investors (like you!) should ignore these trivial fluctuations.

3 stocks for America's next energy boom
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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 Kinder Morgan and Yahoo! and owns shares of Kinder Morgan. 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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