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

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.


Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3025258, ~/Articles/ArticleHandler.aspx, 10/23/2014 11:21:19 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Apple's next smart device (warning, it may shock you

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Advertisement