Why Staples, Inc., Best Buy Co. Inc., and United States Steel Corp. Are Today's 3 Worst Stocks

China allegedly steals U.S. economic secrets; retailers suffer through an awful day on miserable results.

May 20, 2014 at 7:53PM

After a few relatively tame days of trading, stocks went for a ride on Tuesday -- a Tower of Terror-esque ride that sent all three major U.S. indices lower. With nine of 10 sectors slumping, only the mundane world of utilities managed to escape unscathed. Far from unscathed, Staples, (NASDAQ:SPLS), Best Buy Co. (NYSE:BBY), and United States Steel Corp. (NYSE:X) finished as three of the worst performers in the S&P 500 Index (SNPINDEX:^GSPC) today. The S&P, for its part, lost 12 points, or 0.7%, to end at 1,872.

Retail stocks ended as some of the most abject underperformers in the entire stock market today, and shares of office supply giant Staples were no exception, plunging 12.6%. Sometimes the day's worst performers are unfairly singled out by Wall Street, losing ground because a hedge fund manager spoke ill of them, or they hailed from the wrong sector, or a scientific examination of the stock's chart displeased the chartists. Staples fell victim to none of these whims, earning every penny of today's sell-off. The company posted a fifth straight quarter of sales declines (while projecting a sixth), as growing competition from e-commerce foes and mass merchants eat away at its business. I don't blame investors for cringing at today's results.

Meanwhile, Best Buy shares shed 5.6% on Tuesday, as Wall Street found the company guilty of an egregious crime: being a retailer. That's right, folks, Best Buy finished as one of today's three worst stocks despite the fact that it doesn't report quarterly earnings until Thursday. To be fair, Best Buy's future is uncertain, and first-quarter results should give investors a useful gauge of how the turnaround is going. The company is trying to morph into more of a showroom for electronics than a mere electronics retailer as it attempts to conform to the age of Amazon.com.


Will China's alleged indiscretions change international commerce? Photo source: U.S. Steel

Even though United States Steel is far from a retailer, it still fell 4.4% today, earning a spot as one of the worst laggards on Wall Street. The decline is unfortunate for U.S. Steel, because it reflects an obscure threat to its business that just emerged yesterday: spying from abroad. A Pittsburgh jury officially charged five members of the Chinese military with stealing trade secrets and economic espionage, and U.S. Steel was one of the six U.S. companies Chinese officials allegedly stole secrets from. The charges are the first of their kind, and the importance of these secrets to U.S. Steel's business remain to be seen, but some of the company's competitive edge appears to be diminished.

Say Goodbye To "Made-In-China": You Don't Want To Miss This
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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.

The Motley Fool recommends Amazon.com and owns shares of Amazon.com and Staples. Try any of our Foolish newsletter services free for 30 days. 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.

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." 

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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.

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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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