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

All 10 market sectors fell today, and all 3 of these stocks were some of the day's worst performers.

Mar 3, 2014 at 7:26PM

With a nervous eye on the worsening geopolitical conflict between Russia and Ukraine, stocks sold off heavily today. All 10 market sectors lost ground; Wall Street fears that the U.S. response to Russia's invasion of Ukraine's Crimean Peninsula could negatively affect global commerce, and that's not inconceivable. Not only could economic sanctions hurt the flow of goods and services between the U.S. and Russia, but if it reached the point of U.S. military intervention, the economic risks couldn't immediately be foreseen. Recognizing the existence of unknowable risks, investors headed for the exits, and the S&P 500 Index (SNPINDEX:^GSPC) lost 13 points, or 0.7%, to end at 1,845. 

While losers outnumbered gainers by a 2-to-1 margin in the stock market today, some stocks felt the pain more harshly than others. Avon Products (NYSE:AVP) and the two stocks below are such examples. Shares of the beauty products company lost 2.8% Monday, perhaps because investors realize the significant challenges Avon still faces. The entire business model depends on the size and capability of Avon's sales representatives, and last year their fleet size fell by 15%. With North American sales halved since 2007, sales still falling in the most recent quarter, and a net loss in the fourth quarter, things don't look great right now. Thankfully, Avon is popular with the Hispanic community, which should be a boon to its revenue as U.S. demographics change over time.

International Game Technology (NYSE:IGT), which largely lives and dies with the success of the casino industry, saw shares slump 2.5% today. Not only is International Game Technology in the traditional business of offering products like video poker and slot machines, but it's at the forefront of social, mobile, and online gaming, all of which are enormous avenues for growth in the industry going forward. Unfortunately for IGT, its $500 million investment in social gaming company Double Down in 2012 is starting to look like a dud, with Double Down's founders leaving IGT earlier this year, just as the company announced an earnings hit from the two-year-old acquisition.

Lastly, shares of Cliffs Natural Resources (NYSE:CLF) shed 2.4% today. Iron ore and coal producers like Cliffs Natural often, by their very focus, derive a substantial portion of their revenue from steel producers, who use the aforementioned materials to forge steel. Unfortunately, if these materials companies aren't sufficiently diversified, they can essentially morph into proxy investments in the steel industry, and Cliffs investors got a painful reminder of that last week. Shares slumped nearly 5% last Tuesday when reports surfaced that Asian lenders were starting to loan less money to real estate projects in an effort to discourage over-speculation, sending steel prices lower and hitting Cliffs shareholders in the process.

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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 has 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.

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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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