Why Cliffs Natural Resources Inc., Monster Beverage Corporation, and DaVita HealthCare Partners Inc. Are Today's 3 Worst Stocks

Shareholder drama, executive shakeups, and analyst downgrades made these three names the worst performers in the stock market today

Jul 21, 2014 at 7:44PM

Nearly six in 10 stocks fell on the stock market today, as investors cautiously watched the development of both the Russia-Ukraine conflict and escalating violence on the Gaza Strip. On top of that, an avalanche of corporate earnings are set to be unleashed this week, so investors will also have a chance to react to those in the coming days. Cliffs Natural Resources (NYSE:CLF), Monster Beverage Corporation (NASDAQ:MNST), and DaVita HealthCare Partners (NYSE:DVA) shareholders, however, weren't content to wait on earnings to sell off their positions. Each stock ended as one of the worst performers in the S&P 500 Index (SNPINDEX:^GSPC) Monday, as the S&P itself shed 4 points, or 0.2%, to end at 1,973.

Coal and iron ore miner Cliffs Natural Resources shed 4.7% today after the embattled company released a letter to shareholders suggesting how they should vote in an upcoming shareholders meeting. For many moons now Cliffs Natural Resources has been at the wrong end of a relentless PR war. Casablanca Capital, an activist investor that owns just over 5% of shares, has been sharply critical of the company's board, which, in a nutshell, Casablanca alleges is incompetent, power-hungry, self-interested, and destructive to shareholder wealth. The top brass at Cliffs has defended itself vigorously, but wrote an open letter to shareholders today reducing the number of recommended Cliffs-appointed directors to seven from nine, with the remaining four spots ceded to Casablanca. The letter warned that if Casablanca's nominees got the majority of the board seats, they would engage in a "fire sale" of the company's assets, destroying shareholder value. Yikes.


Monster's line of zero calorie, zero sugar products are growing in popularity. Image source: Monster Beverage

Shares of energy drink giant Monster Beverage Corporation lost 4.5% Monday after the stock was downgraded by Morgan Stanley to "equal weight" from "overweight." While the investment bank cited slowing trends and a full valuation for its downgrade, energy drinks were actually the fastest-growing segment of the carbonated drinks market in the U.S. last year, which is why recent speculation has swirled around the company's appeal as a buyout candidate. Monster Beverage does carry a heavier litigation risk than most in the non-alcoholic beverage industry, and just today it issued a statement asserting a lack of evidence in its involvement in the 2011 death of Oklahoma teen Jason Hamric.

DaVita HealthCare Partners is the last and least-severe of today's decliners. Shares of the kidney care company fell 3.9% Monday, also on the heels of analysts that downgraded the stock from outperform to market perform. Raymond James said that a recent executive shakeup at the company created short-term uncertainty, but that DaVita, because of its business model and free cash flow consistency, remains in a strong long-term position. This sort of rationale -- which assumes that market-timing is both possible and potentially lucrative -- is just one of the many reasons the advice of Wall Street analysts shouldn't be heeded by patient, long-term investors.

How to get even more income during retirement
Social Security plays a key role in your financial security, but it's not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

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 and owns shares of Monster Beverage. 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.

A Financial Plan on an Index Card

Keeping it simple.

Aug 7, 2015 at 11:26AM

Two years ago, University of Chicago professor Harold Pollack wrote his entire financial plan on an index card.

It blew up. People loved the idea. Financial advice is often intentionally complicated. Obscurity lets advisors charge higher fees. But the most important parts are painfully simple. Here's how Pollack put it:

The card came out of chat I had regarding what I view as the financial industry's basic dilemma: The best investment advice fits on an index card. A commenter asked for the actual index card. Although I was originally speaking in metaphor, I grabbed a pen and one of my daughter's note cards, scribbled this out in maybe three minutes, snapped a picture with my iPhone, and the rest was history.

More advisors and investors caught onto the idea and started writing their own financial plans on a single index card.

I love the exercise, because it makes you think about what's important and forces you to be succinct.

So, here's my index-card financial plan:


Everything else is details. 

Something big just happened

I don't know about you, but I always pay attention when one of the best growth investors in the world gives me a stock tip. Motley Fool co-founder David Gardner (whose growth-stock newsletter was rated #1 in the world by The Wall Street Journal)* and his brother, Motley Fool CEO Tom Gardner, just revealed two brand new stock recommendations moments ago. Together, they've tripled the stock market's return over 12+ years. And while timing isn't everything, the history of Tom and David's stock picks shows that it pays to get in early on their ideas.

Click here to be among the first people to hear about David and Tom's newest stock recommendations.

*"Look Who's on Top Now" appeared in The Wall Street Journal which references Hulbert's rankings of the best performing stock picking newsletters over a 5-year period from 2008-2013.

Compare Brokers