And the Pigs Get Slaughtered. Today's Pigs: J.C. Penney and RadioShack

Two big losers today and why investors need to stay away from these toxic stocks.

Feb 4, 2014 at 8:00PM

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.

Wall Street is not a nice place. When they say on the Street that the pigs get slaughtered, it refers to things like bloated and outdated companies that, like their barnyard equivalents, eventually have to be put down. Two companies moving a step closer to the slaughterhouse today, having seemingly run their courses, were J.C. Penney (NYSE:JCP) and RadioShack (NYSE:RSHCQ). At this point, it's just a question of how much time and how many resources are wasted trying to save them before the inevitable occurs.

Shares of J.C. Penney plummeted 10.39% today after the company reported a 2% increase to same-store sales during the fourth quarter. That's the company's first comps growth since the second quarter of 2011, but it was far short of the 4.2% analysts wanted to see. There are plenty of investors who think the company doesn't have long to live unless it can rapidly increase sales -- and its performance during the all-important holiday shopping season quarter didn't exactly instill any confidence. If you insist on investing in this company, at least wait until it shows a few quarters of meaningful sales growth -- if that ever happens again.   

For RadioShack, it was a case of what a difference a day can make. Shares climbed by as much as 11.6% during Monday trading and closed up 3.33%, apparently enjoying a bump from the company's Super Bowl ad, because there was essentially no other RadioShack news. Today, the retailer dropped 4.84% during the regular trading session and another 2% after-hours, as unnamed sources reported to The Wall Street Journal that the company will close about 500 of its 4,500 locations. RadioShack poked fun at itself in the Super Bowl ad, basically admitting that it's pulling itself out of the '80s and modernizing, but closing stores for any reason just means the company has fewer places where it can sell its wares and make money. Inventory has been a concern in recent years, too, and investors should watch to see if management decides to start unloading merchandise on the cheap.

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Matt Thalman and The Motley Fool have no position in any of the stocks mentioned. 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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