This Week's 5 Dumbest Stock Moves

These five companies got it wrong this week.

Apr 4, 2014 at 4:45PM

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.

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Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Liquidity Services and owns shares of Barnes & Noble. 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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