Wednesday'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 Wednesday:

Naughty?
Well, OK, we can't exactly call these stocks naughty. We've had stocks that rate four, and even five, stars in this column in the not-too-distant past, and we have another today.

But, as Huey Lewis says, bad is bad. And when our 82,000-person-strong Motley Fool CAPS community of amateur and professional stock pickers speaks with a poor rating, or a negative pitch, I listen. You should too.

Thus, here is today's list of the worst stocks in the world.

Worse
We begin with Motorola, which reported an 84% decline in fourth-quarter earnings. But you need to know the context to understand why Motorola makes our list.

Earlier today, Nokia (NYSE: NOK) reported a 44% gain on the bottom line in its fourth quarter and said that its share of the mobile handset market had reached 40% worldwide. Motorola, as of late last year, had seen its share dip to 13% from 23% in the year prior.

Translation: Macroeconomic factors aren't the problem. Better-performing competition is.

Worser
Next up is Hoku Scientific, which offered fourth-quarter revenue guidance well below Street estimates and warned of profit pressure due to higher costs. Quoting from a company statement:

Based on its current outlook, the Company expects revenue for the fourth quarter ending March 31, 2008 to be in the range of $600,000 to $1.2 million. In addition, the Company expects that it will need to increase its efforts in supporting a polysilicon manufacturing and PV systems installation service business, develop its products and expand its corporate infrastructure. As a result the Company expects its costs to continue to increase significantly and expects to continue to incur losses for the foreseeable future ... [Emphasis added.]

I'd be more forgiving here if Hoku had a history of improving margins and returns on capital (ROC). Sadly, it's the opposite. Gross margin is down to 28.5% over the trailing 12 months from 84.4% in 2005. Worse, Hoku produced positive ROC just once during that same period.

Worst
But our winner is Human Genome Sciences, which revealed that patients exposed to higher dosages of its experimental hepatitis-C drug Albuferon were suffering serious lung-related side effects from regular treatment. Albuferon has been in phase 3 clinical trials.

What to do? HGS is following the advice of an independent monitoring committee to lower the dosage, which should, in theory, prevent side effects.

Here's the problem -- and why Human Genome Sciences takes our prize: This isn't the first time this company has goofed up in a phase 2 trial. During 2003, a treatment for venous ulcers, although proven safe, did little to help patients.

Why is anyone surprised, then, that HGS is having trouble with Albuferon? Small-f fool my genes once, shame on you. Do it twice and ... oh, well, you know.

Human Genome Sciences and its trust-us-we-won't-hurt-you drug-development team ...

Wednesday'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.

I'll be back with more stock horror stories.