This Week's 5 Dumbest Stock Moves

These five companies got it wrong this week.

May 30, 2014 at 5:17PM

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. In space, no one can hear your stream 
Western Digital (NASDAQ:WDC) updated its set-top streaming player, but there's a surprising omission in the new WD TV player. It plays all of the popular file formats, and being made by a hard drive giant, it will naturally play nice with various sources, including networked computers. However, in a shocking move, it won't support Netflix.

Really, Western Digital? The WD TV is more about playing back your own files, but you can't expect people to buy a set-top box for $100 that doesn't seamlessly stream the leading premium video service. Netflix has 35.7 million subscribers in this country and another 12.7 million members overseas. The worldwide figure grows by the millions with every passing quarter. If Western Digital thinks Netflix isn't important, it's missing the point. If features of the WD TV make it difficult to support Netflix, then those features probably aren't as important as Western Digital thinks.

2. You can't spell Costco without C-O-S-T
Buying in bulk remains fiscally fashionable. Costco's (NASDAQ:COST) sales climbed 7% in its latest quarter, fueled by a 5% uptick in comps. That's nice to see, especially with many discounters chiming in with negative same-store sales lately. However, Costco will get no love for seeing its earnings climb at half that pace to clock in at $1.07 a share. Analysts were holding out for a profit of $1.09 a share.

This wouldn't be such a big deal if it were a rare miss, but that is just not the case. Costco has come up short of Wall Street's profit expectations for four consecutive quarters. It gets plenty of praise for its lean operations and employee satisfaction, but something just isn't right if analysts keep overestimating the warehouse club's earnings potential. 

3. Sea the difference 
I took SeaWorld Entertainment (NYSE:SEAS) to task last week for increasing the prices of its one-day tickets to Sea World Orlando and Busch Gardens Tampa. The 3% increase -- up to a freakishly steep $95 -- didn't make sense in light of sluggish attendance. Turnstile clicks declined 4% last year and plunged 13% during this year's first quarter. Raising admission prices after four consecutive quarters of falling attendance didn't seem like a very smart move.

A caveat in all of this was that a major thrill ride was opening at Busch Gardens Tampa. Unfortunately, the Falcon's Fury drop ride has yet to open. Despite the media event several weeks ago and promotional material throughout Tampa claiming that the ride is open, the theme park operator has run into a few snags. This week, it updated the ride's opening to "later this summer" in a move that will likely eat into attendance through June and possibly eat into the next quarter.  

4. You need to earn that ticker symbol
You don't often see Southwest Airlines (NYSE:LUV) on the wrong end of a deceptive marketing accusation, but that's what happened this week when the low-cost carrier was fined $200,000 for advertising $59 fares for certain routes late last year that never really existed. 

Southwest is usually the one calling out the competition for hidden fees. Its "bags fly free" ad campaign takes its airborne rivals to task for not charging what passengers think they will be paying. Whether Southwest is a hypocrite or this was just an honest mistake, it still doesn't look very flattering.

5. Ford tough
It's been a rough year for automakers in terms of having to fix past mistakes, and this week it was Ford (NYSE:F) announcing several recalls totaling nearly 1.4 million cars being called back to remedy defects.

The biggest issue involves 915,000 Ford Escape and Mercury Mariner cars with a potential issue where the torque sensor in the steering column can result in a loss of electric power steering assist. Recalls naturally cover all cars for unlikely scenarios, but it certainly does rough up an automaker's reputation to have to bring cars into service centers for something it should've gotten right the first time.

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

Rick Munarriz owns shares of Ford and Netflix. The Motley Fool recommends and owns shares of Costco Wholesale, Ford, and Netflix. It owns shares of Western Digital. 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.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers