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Why Valero Energy, Mylan, Inc., and Teradata Corporation Are Today's 3 Worst Stocks

Investors fled from the stock market with little discretion on Monday, as all 10 sectors ended in the red and a three-day Wall Street sell-off intensified. After a uniquely bullish 2013, major indexes have remained stagnant; the S&P 500 Index (SNPINDEX: ^GSPC  ) lost 20 points today, or 1.1%, to end at 1,845. It has yet to gain 1% in 2014. While we can ridicule the S&P for its ho-hum performance this year, Valero Energy (NYSE: VLO  ) , Mylan, (NASDAQ: MYL  ) , and Teradata Corporation (NYSE: TDC  ) deserve our concern and inquiry, since each stock ended as an incorrigible underperformer today.

The larger theme of the stock market today -- aside from the fact that everyone was selling them, was that investors rushed to sell momentum stocks above all others. Shares of Valero Energy lost 4.5% Monday, just days after hitting 52-week highs last week. Valero and other oil and gas refiners in the U.S. have benefited immensely from the ban on exporting American crude oil abroad. As my colleague Varun Chandran notes, lifting the ban would undoubtedly pressure refinery margins and hurt their business. But as Capitol Hill starts pondering what a lift on the ban would mean for the American economy, Valero and its peers are beginning to face some political risks.

Image source: Mylan website.

Generic-drug maker Mylan, is well-versed in headaches induced by regulators and Washington lawmakers. In fact, the company is even forced to deal with international regulators in the case of foreign acquisitions, and if you think the $18 billion Mylan isn't vying for a worldwide generic drug empire, then perhaps you haven't been taking your unbranded memory pills. Mylan shares shed 4.4% today after a modest advance on an analyst upgrade last Friday. The upgrade, however, came before Swedish drug maker Meda squashed negotiations that were aimed at joining the two companies. 

Teradata Corporation stands alone as the single stock on today's list that hasn't posted market-beating returns in the last year. While demand for data storage is growing by leaps and bounds, Teradata's real value lies in its data analytics, consulting, and discovery. Shares lost 4.3% on Monday, and they've fallen 14% in the last year as competitors from open-source platforms like Hadoop threaten Teradata's business model. The company almost seems desperate to reclaim the throne as the king of data and data analytics, putting out three press releases over a span of 10 minutes this morning touting new "unprecedented," "sophisticated," and "unmatched" offerings.

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Comments from our Foolish Readers

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  • Report this Comment On April 09, 2014, at 11:15 AM, rothyman wrote:

    Really? What kind of Fools are they hiring over here now?

    Teradata hasn't beat on earnings in over a year? Oh yeah, except for last quarter -

    And open-source platforms like Hadoop threaten Teradata's business model?

    Please, do your research. Hadoop doesn't threaten Teradata's business model; it empowers it. And vice versa. TDC's stock has fallen because it's top customers have cut back on IT spending. You're seeing the same effect on Oracle and IBM's business models as well (except 100% of their business doesn't rely on data warehousing, so it isn't reflected in their stock price).

    If there's one thing that's annoying, it's writers and analysts who don't do their research. Totally irresponsible and reckless on your part.

  • Report this Comment On April 11, 2014, at 3:11 AM, SilverFox1967 wrote:

    Remember this article: What Makes Teradata One of America's Best Companies (The Motley Fool, February 2013),

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Fool since 2012, unique fingerprints since birth. Age 7: Put lifetime savings ($18.37!) in the bank, became disillusioned with low interest, and a fascination with the stock market was born.

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