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. Goo gull
The world's leading search engine isn't doing as well as analysts expected. Google (NASDAQ: GOOG  ) (NASDAQ: GOOGL  ) fell short of Wall Street's revenue and profit targets. Some may argue that Google itself didn't miss, as it doesn't provide guidance, but the market prices the shares based on those projections.

The good news is that Google came through with a 26% spike in the volume of paid clicks. Unfortunately, the average price paid per click fell 9%. This isn't anything to be worried about. Price per click has declined for 10 quarters in a row. Mobile continues to gain share of Google's overall search queries, and that traffic remains less lucrative than PC usage.

2. Is it best to say goodbye?
Best Buy  (NYSE: BBY  )  went from being a market darling in 2013, soaring 237%, to becoming one of this year's biggest large-cap losers, shedding 39% of its value year to date. Things continue to get worse for Best Buy. Shawn Score, the chain's president of U.S. retail stores, announced his retirement this week. It's easy to be skeptical, and not just because he's only 48. The retirement is effective immediately, suggesting something unexpected. He has also been at the post for only seven months.

We now know that Best Buy's challenges are real. Last year's turnaround was a head fake. It isn't easy to be a consumer electronics retailer in an era of digital delivery for media and cheaper online prices for the hardware that makes the online ecosystems possible.  

3. Up in the air
Social-media nightmares don't get a whole lot worse than this: US Airways -- just months from completing its merger with American to form American Air Group -- found itself tweeting a graphically obscene photograph of a naked woman getting intimate with a model airplane in response to an irate passenger.

There could be a simple explanation for this. Maybe the social-media manager was copying the URL address of the vulgar snapshot -- which was originally posted to US Airways' Twitter feed by another Twitter user -- to pass it on to a superior or perhaps a friend. Then that person may have forgotten the last link he or she copied, and then subsequently pasted the lewd link, rather than a link to US Airways' online feedback page, in the ill-fated tweet.

US Airways says it will let the mishap slide, but it nonetheless made the airline the viral laughingstock of the week. 

4. Pop goes the housing bubble
St. Joe  (NYSE: JOE  )  was a big winner during the housing boom a decade ago, developing huge tracts of land in Florida. It retreated when the financial crisis hit, but now it's back with its hard hats.

St. Joe is submitting an application for its plans to develop a massive 110,000-acre area over the next 50 years. The development will feature residential communities marketed to active, retired adults, with town centers to keep commercial opportunities nearby. 

There's certainly nothing wrong with St. Joe cashing in on the huge amount of land it accumulated when it was a paper giant. The timing just seems to be off -- even for a 50-year development plan that will invariably go through various cycles -- given the recent spike in mortgage rates and signs that the residential real-estate market is cooling down.

5. Out of the blue
IBM  (NYSE: IBM  )  is feeling pretty mortal these days. The tech bellwether that once had no problem surpassing Wall Street expectations is struggling just to keep up. Adjusted earnings declined 15% to match the $2.54 per share that analysts targeted, and revenue came in weaker than the pros had projected, slipping by 4% for the period.

If the economy's improving, why did IBM just put in its lowest quarterly revenue growth in five years? It's not just a big drop in its systems and technology business. Even services checked in with a slight dip on the top line. IBM is putting the "blue" in Big Blue.

Bounce back with six smart stock moves
They said it couldn't be done. But David Gardner has proved them wrong 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 (1) | 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 17, 2014, at 4:57 PM, GaryDMN wrote:

    Explain how this is not a long term trend: "This isn't anything to be worried about. Price per click has declined for 10 quarters in a row" - It appears their cash machine's output in diminishing and will continue to diminish. Google is very good at delivering hype and vaporware, but light on delivering profitable products.

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: 2919077, ~/Articles/ArticleHandler.aspx, 11/27/2014 5:22:45 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...

Today's Market

updated 19 hours ago Sponsored by:
DOW 17,827.75 12.81 0.00%
S&P 500 2,072.83 5.80 0.00%
NASD 4,787.32 29.07 0.00%

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

11/26/2014 3:59 PM
AAL $44.97 Up +0.82 +0.00%
AMERICAN AIRLINES… CAPS Rating: **
BBY $38.75 Up +0.34 +0.00%
Best Buy CAPS Rating: *
GOOG $540.37 Down -0.71 +0.00%
Google (C shares) CAPS Rating: ****
GOOGL $547.73 Down -1.50 +0.00%
Google (A shares) CAPS Rating: ****
IBM $161.95 Up +0.19 +0.00%
International Busi… CAPS Rating: ****
JOE $18.75 Down -0.01 +0.00%
The St. Joe Compan… CAPS Rating: **

Advertisement