Tuesday's Worst Stocks in the World

Bad days. We all have them; some of us deserve them.

Here are five stocks whose naughty ways drew investors' scorn on Tuesday:

Company

Closing Price

CAPS Rating (5 max)

% Change

52-Week Range

TravelCenters of America (AMEX:TA)

$17.16

**

(27.75%)

$16.95 - $47.41

PokerTek (NASDAQ:PTEK)

$6.18

*

(22.07%)

$6.13 - $13.75

Quebecor World (NYSE:IQW)

$4.18

*

(19.77%)

$4.10 - $14.79

Nastech Pharmaceutical   (NASDAQ:NSTK)

$4.87

**

(15.16%)

$4.65 - $19.98

Pilgrim's Pride (NYSE:PPC)

$23.74

**

(5.27%)

$23.57 - $41.00

Sources: The Wall Street Journal, Yahoo! Finance, Motley Fool CAPS.

Naughty?
Well, OK, we can't exactly call these stocks naughty. But none of them get much love from our Motley Fool CAPS community of more than 74,000 amateur and professional stock pickers.

To the contrary -- when it comes to these stocks, CAPS investors have gone thumbs down more often than film critic Roger Ebert. They believe that none of these stocks is worth owning and that some may be worth shorting.

Which of today's candidates is worst? Read on, dear Fool.

Worse
We begin with truck-stop operator TravelCenters of America, which reported lower adjusted third-quarter earnings -- or EBITDAR, as TravelCenters calls it -- even after you account for the acquisition of its main rival in May.

Investor NILLionaire says to expect business to get worse before it gets better. If it ever does, that is. Quoting:

I am a truck driver and I like going to T/A and Petro. But the writing is on the wall for the trucking industry. Warren Buffett is betting on the railroads for a reason. Now with the prospect of Mexican truckers crossing our borders, there is little hope for these kinds of truck stops ... You should see the empty restaurants at these places. It is getting worse every year.

Yeesh. Hard to believe this isn't our winner, isn't it?

Worser
Next up is printer Quebecor World, which on Tuesday made public its plans for a combined debt and equity offering worth up to $787 million. The company is seeking roughly $1 billion in fresh capital, $314 million of which is coming from last week's sale of its European operations ($213 million is to be paid in cash).  

I know what you're thinking: This combined offering will transform Quebecor's beleaguered balance sheet. You're mostly right. The problem lies within this quote in the press release:

The Company intends to ... redeem its Series 5 Cumulative Redeemable First Preferred Shares for an aggregate redemption price of Cdn$175 million (approximately $185 million) plus accrued and unpaid dividends.

Whoops. Quebecor has more than just $2.26 billion debt. It also has redeemable stock. Plenty of redeemable stock; $388.4 million worth, according to Capital IQ. At least $185 million of that must be accounted for in the recapitalization.

Anyone else wondering why Quebecor didn't just call this a stock swap?

Worst
But our winner is PokerTek, which manufactures automated poker tables that are supposed to make human dealers obsolete.

You can see the story stock in here, can't you? Robots changing yet another industry? The next iRobot (Nasdaq: IRBT  ) or Intuitive Surgical (Nasdaq: ISRG  ) in the making?

Not so fast. Even though the company cleaned up its act by booting its ethically questionable chief financial officer in September, PokerTek hasn't ever been an excellent business:

Return on Capital

Trailing 12 Months

2006

2005

Total

(35.0%)

(33.8%)

(20.4%)

Source: Capital IQ, a division of Standard & Poor's.

PokerTek would likely counter that it now has 131 of its PokerPro tables in operation, up sixfold from this time last year. No doubt that's good progress, but there are hundreds of casinos around the world spreading poker.

Now, to be fair, that could be a good thing. It could mean that PokerTek has a lot of runway ahead. But that's only if the company has the capital to take advantage. I'm not so sure it does.

Consider the numbers. PokerTek has burned through $10.8 million in cash year to date, if you exclude the $12.6 million generated from a private stock placement, up from $7.4 million at this time in 2006.

What's more, there was just $11.1 million left in the bank as of Sept. 30 -- not enough to fund operations for more than a few quarters at that rate. You know what that means. Management, which has diluted the interests of existing investors by 15.3% over the past 12 months, will be issuing shares like toilet paper at an incontinence treatment center for the foreseeable future.

Rosie the Robot cleans houses, folks. She isn't programmed for pot-limit Omaha. Not yet, at least. PokerTek and its let's-sell-some-shares-to-feed-the-robots management team ... Tuesday's worst stock in the CAPS world.

Do you agree? Disagree? Let us know what you think by signing up for CAPS today. It's 100% free to participate.

See you back here tomorrow for more stock horror stories.


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