This Week's 5 Dumbest Stock Moves

These five companies got it wrong this week.

Apr 17, 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. 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.

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Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Google (C shares). It also owns shares of IBM. 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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