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:

Naughty?
Well, OK, we can't exactly call these stocks naughty. But none of them gets much love from our 75,000-person-strong Motley Fool CAPS community of 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 cosmetics queen Bare Escentuals, which on Tuesday lost its president, Diane Miles, after just a year and  a half on the job, Forbes reports. Her immediate plans are to pursue (ahem) "other opportunities."

The company, meanwhile, is left splitting her responsibilities between chief marketing officer Jim Taschetta, who joined Bare Escentuals last month, and CEO Leslie Blodgett. Not exactly ideal for a firm whose fortunes are linked to the fickle feelings of female fashionistas.

Worser
Next is Genesco, which on Monday received a subpoena from the U.S. Attorney in New York. Regulators are seeking to learn whether Genesco committed fraud in its negotiations and merger agreements with Finish Line (NASDAQ:FINL).

Interestingly, the investigation follows on the heels of a lawsuit filed by Swiss banker UBS (NYSE:UBS), in which says it didn't have all the facts when it agreed to finance Finish Line's $1.5 billion takeover of Genesco. It now claims that the combined entity could be insolvent.

For its part, Genesco remains defiant. Here's how CEO Hal Pennington put it in a press release: "The U.S. Attorney subpoena comes on the heels of the baseless fraud allegations made by UBS ten days ago. These allegations are completely without merit and are simply part of UBS' litigation tactics to avoid their contractual obligations." (Emphasis added.)

Baseless accusations? Perhaps. But is Genesco blameless? Hardly. A blind monkey could have seen how bad his business was. UBS should have, too.

Here is Genesco's cash-flow data, all of which was and still is publicly available. Numbers are in millions.

Notice, too, how return on capital has cratered right alongside FCF:

Maybe Pennington needs to point the finger at himself?

Worst
But our winner is Arbitron, which announced that it will have to delay the rollout of an automated measurement device called the Portable People Meter in nine markets. (Am I the only one who badly wants to say "Purple People Eater" there? Moving on.)

Wait till you hear what's behind the delay. Apparently, some advertisers are convinced that the PPM, as it's known, doesn't collect enough relevant data. Quoting from Arbitron's press release: "We remain confident in the audience estimates that the Portable People Meter service is producing. However, over the past three weeks, feedback from our customers, the Media Rating Council and other constituencies has led us to conclude that the radio industry would be better served if we were to delay further commercialization of the PPM in order to address their issues." (Emphasis added.)

Translation: our customers don't really like it. Wonderful.

Over the short term, this news means that, in many markets, Arbitron will keep using the paper-and-diary system it's had in place since 1965. And profits will suffer as a result. Arbitron now estimates full-year 2007 earnings of $1.30-$1.35 a share, down from earlier projections of $1.35-$1.45.

Arbitron and its someday-we'll-make-it-to-the-'70s management team ... Tuesday's worst stock in the CAPS world.

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See you back here tomorrow for more stock horror stories.