This Week's 5 Dumbest Stock Moves

These five companies got it wrong this week.

Jul 18, 2014 at 5:15PM

Stupidity is contagious -- even respectable companies can catch it. As we do every week, let's look at five dumb financial events from this past week that may make your head spin.

1. It's raining pink slips
It isn't a surprise to see Microsoft (NASDAQ:MSFT) resorting to layoffs. With a new CEO and a major recent acquisition, it was really just a matter of time before the world's largest software company began to prune its payroll.

However, Microsoft makes the cut this week because it plans to eliminate 18,000 positions over the next year. A little more than two-thirds of the cuts will come from its recent mobile handset acquisition. That was expected, but 18,000 jobs -- and the pre-tax charge of as much as $1.6 billion associated with the move -- is a bit extreme. At the very least, morale will be a problem as Microsoft shrinks in scope.

2. Krash Kors
It was a rough week for Michael Kors (NYSE:KORS), with several analysts downgrading the stock or lowering their price targets. The fear here is the deep summertime discounting that they're seeing on the company's designer handbags and accessories. Kors typically has markdowns to make room for incoming fall fashions -- and one analyst bucked the negativity by arguing that the seasonal discounts are in line with Kors' action a year earlier -- but the pros are still worried.

Kors is reporting in less than three weeks, so the push by so many analysts to temper enthusiasm is troublesome. Then again, Wall Street has never done a good job of assessing how Kors is doing. Over the past four quarters we've seen Kors top analyst bottom-line expectations by 25%, 4%, 29%, and 15%, respectively. Something's got to give come Aug. 5, when Kors will report fresh financials.

3. Gone in a flash
SanDisk (NASDAQ:SNDK) shares took a hit on Thursday after the company gave a weak outlook for the current quarter. The rearview mirror looks great: The flash memory giant came through with an 11% pop in revenue as a 51% spike in volume was more than enough to offset a 26% plunge in pricing. The lower prices didn't squeeze margins too badly, with SanDisk's adjusted profit of $1.41 per share besting the $1.39 per share that analysts had laid out. 

However, SanDisk's top-line outlook for the third quarter is lower than what Wall Street had forecast. SanDisk's guidance on gross margins and forewarning that the second half of the year will be supply constrained didn't win over too many investors. The stock slumped 14% on Thursday as a result of the troublesome outlook.

4. Mattel hell
There's no time to toy around at Mattel (NASDAQ:MAT). The leading toymaker posted disappointing quarterly results on Thursday morning, weighed down by a 9% decline in worldwide sales.

There was a 15% drop in Barbie sales, but that wasn't even as bad as the 17% plunge at Fisher-Price. Yes, even the seemingly timeless Fisher-Price kids toys have fallen out of favor with today's jaded toddlers and their parents. This is now the third quarter in a row where Mattel has fallen short of Wall Street's profit expectations. Mattel needs to stop playing games -- and the country needs to start.

5. It doesn't check out if folks don't check in
RealPage (NASDAQ:RP) is one of Friday's biggest losers after offering up preliminary financial results that fell woefully short of market expectations. The provider of property management software solutions now sees revenue for the recently concluded second quarter clocking in between $93.8 million and $94.8 million, essentially flat with the prior year's results but well short of the $107.2 million that analysts were forecasting. 

RealPage blames the health of the leasing market for the shortfall as low vacancy and resident turnover rates find property owners relying less on RealPage's marketing solutions. It had to discount aggressively to gain market share at the expense of margins, and that naturally isn't going to fly with investors banking on bottom-line improvement.

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.

Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Mattel and Michael Kors Holdings. The Motley Fool owns shares of Michael Kors Holdings and Microsoft. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

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.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

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. It's also featured on several dozen 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 ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers