Why Cliffs Natural Resources Inc., Best Buy Co. Inc., and Under Armour, Inc. Are Today’s 3 Worst Stocks

Angry activist investors and a risk-averse attitude make these three the worst performers in the stock market today

Jul 10, 2014 at 7:21PM

The stock market took a hit today as investors fretted over news that a major player in Portugal's banking system could be in trouble. The fear is that a banking crisis in Portugal could cause contagion in Europe, which, in turn, would affect global markets. Most stocks gradually recovered throughout the day from morning lows, but shares of Cliffs Natural Resources (NYSE:CLF), Best Buy (NYSE:BBY), and Under Armour (NYSE:UA) each posted steep losses nonetheless. The S&P 500 Index (SNPINDEX:^GSPC) lost eight points, or 0.4%, to end at 1,964.

Iron ore and coal producer Cliffs Natural Resources sank 4.8% today, finishing as the worst performer in the entire S&P 500. Longtime shareholders are probably familiar with Casablanca Capital, a firm that owns more than 5% of Cliffs Natural Resources stock. Casablanca is, perhaps, the very definition of an activist investor, lobbying fiercely for a shakeup in a management team it says is destroying the company. Casablanca released a note to shareholders today calling for the ouster of six of the company's directors at the annual shareholders meeting later this month.

The fears from across the pond in Europe sparked many investors to take a good look at their asset allocations, and shift money to safe havens like gold and treasuries. This wasn't good for investors in high-growth names or turnaround stories. Best Buy shares fall into the latter category, and the stock tumbled 3.2% today as it fell out of favor with more conservative investors. While my colleague Timothy Green pointed out several days ago that the electronics retailer wisely divested from its European operations last year, he suggests that Best Buy should continue selling off its international businesses in China and, perhaps, even Canada.


Under Armour is making inroads in athletic footwear. Image source: Under Armour

Lastly, shares of Under Armour shed 2.9% today, as investors shied away from the sports apparel retailer in favor of less-expensive stocks. Under Armour trades at 75 times earnings today, quite a multiple for a company whose profit growth has been decelerating for the last four years. While Under Armour is certainly more exciting than its much larger rival Nike, it may take decades for the company to reach Nike's level of dominance in the footwear market -- if it ever gets there.

Warren Buffett: This new technology is a "real threat"
At the recent Berkshire Hathaway annual meeting, Warren Buffett admitted this emerging technology is threatening his biggest cash cow. While Buffett shakes in his billionaire boots, only a few investors are embracing this new market, which experts say will be worth more than $2 trillion. Find out how you can cash in on this technology before the crowd catches on, by jumping into one company that could get you the biggest piece of the action. Click here to access a FREE investor alert on the company we're calling the "brains behind" the technology.

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 Nike and Under Armour. The Motley Fool owns shares of Nike and Under Armour. 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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