Why Exelon Corporation, NetApp Inc., and FirstEnergy Corp. Are Today's 3 Worst Stocks

With utilities and telecoms lagging other sectors Monday, two high-dividend names end near the bottom of the stock market today

May 12, 2014 at 7:33PM

Stocks ended broadly higher on Monday, with gainers outnumbering losers by a 4-to-1 margin. With earnings season over and a pretty bare slate of economic events on the agenda, investors were extremely risk tolerant on Monday, returning en masse to the beaten-down tech and health care sectors. Telecom and utilities were the only two sectors to lose ground today, and Exelon Corporation (NYSE:ED), NetApp (NASDAQ:NTAP) and FirstEnergy (NYSE:FE) finished as the S&P 500 Index's (SNPINDEX:^GSPC) worst-performing stocks. The S&P, for its part, added 18 points, or 1%, to end at 1,896. 

Exelon Corporation, the largest utilities provider in the U.S., lost 2.2% on Monday. Utility stocks tend to underperform in bull markets, since their steady, low-growth business models and fairly predictable cash flows don't offer the explosive growth Wall Street craves. A proposed acquisition of the natural gas and electric utility company Pepco for $6.8 billion last week would make Exelon even more mundane and predictable, since Pepco is exposed to a ton of government regulation. The stock will also begin trading ex-dividend on Wednesday, meaning that anyone holding the stock at the closing bell tomorrow will be entitled to the company's next quarterly dividend.

Data storage company NetApp saw shares fall 1.8% on Monday after a Raymond James analyst downgraded the stock from "outperform" to "market perform." Claiming that margins have peaked and new competitors are threatening its business, the downgrade comes weeks before quarterly results and as shares of competitor Nimble Storage were upgraded on potential gains in market share.


A FirstEnergy truck repairs power lines. Source: company website

Finally, shares of FirstEnergy shed 1.7%, contributing to the decline of the utilities sector on Monday. FirstEnergy is an electric utility with a presence in six states from Ohio to New York. Like Exelon, the stock boasts a sizable dividend, paying a 4.3% annual yield at the moment. The company missed earnings expectations in the most recent quarter, and worried investors last week by forecasting lower full-year earnings than expected. It also expects the competitive environment to make for "extremely challenging" conditions in the coming quarters, a choice of phrasing that may rightfully be spooking off investors.

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John Divine has no position in any stocks mentioned. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.

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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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