Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



This Week's 5 Dumbest Stock Moves

Stupidity is contagious -- even respectable companies can catch it. As we do every week, let's take a look at five dumb financial events this week that may make your head spin.

1. Book burning
A major investor is turning the page on Barnes & Noble  (NYSE: BKS  ) . John Malone's eclectic media empire is reducing its stake in the struggling bookseller, filing to sell 90% of its shares in a move that will lower Malone's stake from 17% to less than 2%.

Barnes & Noble has been struggling as bibliophiles turn to digital reads, and the chain's bold foray into e-readers with the Nook has flopped. Investors have still stuck around, hoping for a buyout offer or a turnaround. It seems as if one sizable investors has had enough. The stock shed 14% of its value on the news yesterday.

2. Joanie doesn't love CACI 
CACI  (NYSE: CACI  )  doesn't report financial results until the end of this month, but it still chimed in with a problematic outlook. The provider of information solutions now sees a profit of $5.12 per share to $5.51 per share on $3.5 billion to $3.6 billion in revenue. Wall Street was targeting net income of $5.78 per share on revenue of $3.71 billion.

Contractor orders have slowed since the passage of the omnibus appropriations bill. CACI has also been slowed by reductions in Afghanistan-related material purchases and lower run rates for its professional-services contracts.  In the end, the market doesn't like to be disappointed. 

3. Nine lives
Legendary fund-manager Bill Gross has hit hard times. Outflows continue at a torrid pace for his iconic PIMCO Total Return Fund. It's hard to keep investors around when you're you've delivered a small loss over the past year at a time when most funds have posted healthy gains.

Many media outlets are taking Gross to task for using his recently deceased cat as fodder for this week's latest fund update, but that's not why this story makes the cut as a "dumb" move. PIMCO Total Return experienced $3.1 billion in outflows for the month of March, experiencing 11 consecutive months of greater outflows than inflows.

4. Rough seas ahead
SeaWorld  (NYSE: SEAS  )  is still struggling with its turnstile clicks.

The marine life theme park operator warned that it welcomed just 3 million guests at its parks during the quarter, well short of the 3.5 million visitors that it entertained during last year's first quarter. Other theme and amusement park operators seem to be holding up reasonably well, so clearly the Blackfish documentary continues to peck away at SeaWorld's fundamentals. 

SeaWorld is sticking to the revenue and adjusted EBITDA guidance that it initiated last month, but clearly it will have to get more aggressive in promoting its attractions at a time when a growing number of people are turning on its practice of keeping killer whales in captivity.

5. Liquidity concerns
Shareholders of Liquidity Services (NASDAQ: LQDT  ) have had a rough April. The stock has fallen nearly 30% through Thursday's close, falling sharply in each of the month's first three trading days.

The surplus-liquidating marketplace operator slumped after providing updates on bidding results for the U.S. Department of Defense non-rolling-stock and rolling-stock surplus contracts. Investors weren't happy with how high it had to bid to win the non-rolling-stock contract. It then followed that up by withdrawing from the live auction for the rolling-stock contract after that, too, got out of hand.

Bounce back with six smart stock moves
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, one of his favorite stocks recently became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Read/Post Comments (3) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 05, 2014, at 5:14 AM, kickbishopbrenna wrote:

    Rick, why are these dumb? seems to me avoiding these 5 examples would be downright sensible? You mean dumb to buy them or dumb because of the moves the holders made?? I note BKS is a recommended stock in one portfolio (MFO) and it raised a few eyebrows (well, 2..mine!) at that time, looks like it just might squeak a profit as the BKS recommendation expires in under 2 weeks.



  • Report this Comment On April 07, 2014, at 8:43 AM, hostiletrader wrote:

    I agree with Brendan, you didn't show how these were dumb moves. Dumb for the companies? Dumb to have bought them? Dumb to have sold them? Your article was hastily written and should have been edited better.

  • Report this Comment On April 17, 2014, at 12:31 PM, Maxwell0819 wrote:

    Glad it wasn't just me feeling dumb for not finding the dumb moves. Just plain dumb. Rick, please add the 'what' or 'why' these are dumb.


Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2902863, ~/Articles/ArticleHandler.aspx, 9/3/2015 9:57:28 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Rick Munarriz

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.

Today's Market

updated 41 minutes ago Sponsored by:
DOW 16,374.76 23.38 0.14%
S&P 500 1,951.13 2.27 0.12%
NASD 4,733.50 -16.48 -0.35%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/3/2015 4:03 PM
BKS $15.85 Up +0.11 +0.70%
Barnes & Noble CAPS Rating: *
CACI $76.77 Down -0.28 -0.36%
CACI International… CAPS Rating: ***
LQDT $7.46 Down -0.02 -0.27%
Liquidity Services CAPS Rating: ****
SEAS $17.52 Up +0.24 +1.39%
SeaWorld Entertain… CAPS Rating: *