Why Noble Corp., Cliffs Natural Resources, and Frontier Communications Are Today’s 3 Worst Stocks

From energy and materials to tech and telecom, these three stocks were the worst in the S&P 500 on Tuesday

Apr 1, 2014 at 7:10PM

The S&P 500 Index (SNPINDEX:^GSPC) set a new closing record on Tuesday, tacking on 0.7% to finish at 1,885. But materials companies Noble Corp. (NYSE:NE) and Cliffs Natural Resources (NYSE:CLF), along with tech player Frontier Communications (NASDAQ:FTR), each saw their shares fall markedly. Despite their declines on Tuesday, intraday declines like these don't mean much to a company's long-term prospects, and at least two of today's three laggards could be big winners for the patient investor.

Shares of Noble, which is an offshore drilling contractor for oil and natural gas outfits, slumped 2.2% today, as the prices of oil and natural gas both declined. Energy prices tend to directly impact Noble stock, since the company can charge energy producers more to rent out its rigs when the commodities are more valuable. That's all well and good when prices are rising, but when both oil and natural gas fall around 2% in a single day as they did on Tuesday, shareholders are going to feel the pain. 


Iron ore, an essential component in steel

Another stock ending toward the bottom of the S&P, Cliffs Natural Resources shed 2.1% today. An iron ore and metallurgical coal miner, Cliffs Natural produces two of the vital components used in the production of steel. Herein lies a longer-term concern about the company: Asian demand for steel inputs has propped up global prices as China in particular has grown by leaps and bounds in the past decade. But China's government is taking a more cautious approach to growth, discouraging major construction and lending in recent months to prevent a possible real estate bubble. If this continues, it will likely hurt steel demand, and subsequently Cliffs will feel the pain as well.

Finally, Frontier Communications, the only tech company on today's list, lost 1.9% on Tuesday. A 2% setback isn't much to fret over after investors enjoyed a 14% gain in the last month. In fact, shares are up more than 40% in the last year, they offer a 7% dividend, and the company is uniquely positioned as a low-cost Internet provider. The stock briefly hit 52-week highs today, and as long as it's able to pay its hefty dividend to shareholders, I don't see a meaningful stumble happening anytime soon.

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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.

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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. 

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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." 

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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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