Why Jabil Circuit, Occidental Petroleum, and International Game Technology Are Today’s 3 Worst Stocks

An unwise partnership, a regulatory nightmare, and dividend dynamics drive these three companies to the bottom of the stock market today

Mar 20, 2014 at 7:34PM

All three major indexes finished higher on Thursday, as strong numbers from the U.S. manufacturing sector gave the stock market a boost. With worries about the Russia-Ukraine conflict waning but still in the air, markets have advanced this week on cautious investor optimism. But investor optimism was nowhere to be found for Jabil Circuit, (NYSE:JBL), Occidental Petroleum (NYSE:OXY), and International Game Technology (NYSE:IGT) today; each finished as one of the worst-performing stocks in the entire S&P 500 Index (SNPINDEX:^GSPC). The S&P itself finished 11 points, or 0.6%, higher, at 1,872.

Jabil Circuit shares shed 2.9% as Wall Street recoiled at the negative impact that cutting ties with BlackBerry is having on its business. Now, to be fair, BlackBerry made up about 12% of Jabil Circuit's sales before Jabil decided to "disengage" from the beleaguered phone maker. Shareholders have known for some time that BlackBerry's death spiral would also be painful for its suppliers, and that knowledge was built into the stock price. That said, the company's revenue miss yesterday highlights just how difficult it will be for Jabil to replace that business.

Occidental Petroleum fell for a second straight day Thursday as investors continued to react to the city of Carson, California's brand spankin' new drilling ban. Shares lost 2.3% today as fallout from the decision continued. Occidental plans to spin off its California business -- in part because of the difficult regulatory environment in the state -- and the city of Carson imposed a moratorium on new drilling, and suspended talks with Occidental about plans for 200 additional wells until the spinoff is complete. The City Council cited concerns about controversial "fracking" techniques in its decision, apparently not buying Occidental's claim that no such techniques would be used in the wells. 

Finally, International Game Technology fell 2.2% on Thursday. The company makes slot machines and other high-tech gaming products, and has also invested heavily in mobile and social gaming in recent years. Today's slump isn't as bad as it appears; about half of the decline can be chalked up to IGT shares going ex-dividend today. Ex-dividend dates have a downside bias, as some short-term investors sell their shares with the assurance that they'll still receive the next quarterly dividend, anyway. Of more concern to the long-term picture, however, is the future of social gaming, and the company's ability to cash in on the potentially lucrative trend. IGT ponied up $500 million to acquire social gaming company DoubleDown Casino in 2012, only to see its founders leave the company earlier this year as the acquisition's success soured.

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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 may not 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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