This Week's 5 Dumbest Stock Moves

These five companies got it wrong this week.

Apr 25, 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. America isn't riding on Dunkin'
It's never cool to offer up a scapegoat that doesn't hold up across the industry. Doughnut giant Dunkin' Brands (NASDAQ:DNKN) missed Wall Street's top- and bottom-line targets, blaming winter snowstorms for the shortfall as same-store sales only rose 1.2%. 

It's easy to see why wintry weather kept drivers off the road, but shouldn't the allure of Dunkin' Donuts' coffee be a dinner bell in the cold? The bearish thesis came undone later in the week when Starbucks clocked in with a 6% spike in comps during the same quarter.

It's true that Dunkin' Donuts does have a particular concentration in the Northeast, where the storms were at their worst. There's also something to be said about Dunkin' Donuts being known more for its doughy treats than its java. But it still wasn't a flattering turn of events.  

2. Tarnished arches 
Comps at Dunkin' Donuts may have failed to keep up with inflation, but things were even worse at McDonald's (NYSE:MCD). The world's largest burger chain's U.S. comparable-restaurant sales declined 1.7% for the quarter.

This isn't a fluke. Comps have been negative at McDonald's for three consecutive quarters. That's pretty significant for a chain that had pieced together nearly a decade of positive comps before starting to feel mortal. Widening its menu options hasn't helped, and late last month McDonald's moved to push prices higher by an average of 3%. That won't help turn store traffic around.

3. Cereal killer
Before you click "like" on that Cheerios fan page, you may want to consider whether it will prohibit you from suing General Mills (NYSE:GIS) in the future. General Mills caught some heat last week after updating its privacy policy, requiring all disputes related to purchases for anyone patronizing a General Mills online property to be "resolved through binding arbitration."

New York Times article suggested that something as simple as using a General Mills online coupon or following any of its brands through social media would prohibit someone from getting into legal fisticuffs with the food giant. General Mills countered that the new privacy policy was being misunderstood, but it still reversed it this past weekend. 

4. Panned-ora
It doesn't seem fair at first, but Pandora (NYSE:P) posted better-than-expected financial results for the first quarter and raised its top-line guidance for all of 2014, but the stock still took a hit. The culprit here is that most of the $10 million upside revision in the music streaming leader's outlook was accounted for during the first quarter.

It also didn't help that guidance for the current quarter -- calling for $213 million to $218 million in revenue -- is short of the $219.3 million that Wall Street pros forecast. The streaming market is starting to get more competitive, and Pandora can't afford to disappoint, given the stock's lofty valuation.

5. Just due it
Nike (NYSE:NKE) may be ready to bow out of the fitness bracelet market. CNET reported that layoffs at the FuelBand's hardware division suggest that it will discontinue the activity-tracking wristbands that have been a distant third in the market. Fitbit and Jawbone continue to dominate the niche. 

Nike denies that it's bowing out of the market, but industry tracker NPD Group is reporting this week that FuelBand's market share has shrunk to just 7% of retail sales. This is just a hunch, but I think failing to roll out an Android Bluetooth app and keep pace with smartwatch innovations doomed the bracelet.

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Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends and owns shares of McDonald's, Nike, Pandora Media, and Starbucks. 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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