Bad days. We all have them; some of us deserve them. Here are five stocks whose naughty ways drew investors' scorn on Thursday:
|
Company |
Closing Price |
(5 max) |
% Change |
52-Week Range |
|---|---|---|---|---|
|
Tween Brands |
$17.91 |
** |
(22.74) |
$17.81-$49.00 |
|
Focus Media |
$31.53 |
***** |
(8.98) |
$29.25-$66.30 |
|
Stage Stores |
$14.12 |
** |
(8.55) |
$9.90-$23.69 |
|
Ambac Financial |
$5.27 |
* |
(6.73) |
$4.50-$96.10 |
|
Rite Aid |
$2.60 |
** |
(5.11) |
$1.91-$6.74 |
Naughty?
Well, OK, we can't exactly call these stocks naughty. There are days when five-star winners and newsletter recommendations appear on this list. Today is one of those days.
If you're an investor, you'll have plenty of bad days. The trick is to avoid dating -- or, worse, marrying -- your losers. That's why I listen when our 96,000-person-strong Motley Fool CAPS community of stock pickers speaks with a poor rating or a negative pitch. You should, too.
Thus, here is today's list of the worst stocks in the world.
Worse
We begin with Focus Media, which sharply reduced revenue and profit guidance yesterday. Why? Because of a new rule that requires the company to obtain permission before distributing ads to mobile customers in the Sino superpower.
The financial impact is surprising. Focus says it will bring in $40 million less revenue than previously expected and that, consequently, adjusted profits will come in $20 million short of its projections.
Obviously, this was a pretty profitable business -- until it wasn't.
Foolish colleague Rick Munarriz has it right, I think. Investors eyeing massive wireless growth in China would do best to stick with the company that already has a hammerlock on the market: China Mobile
Worser
Next up is Ambac Financial, which made its first appearance in these digital pages in November. Back then, investors were selling because of fears that the credit crunch would, um, crunch its mortgage insurance portfolio.
CAPS All-Star SteveInChicago put it this way in September:
We're seeing a spike in foreclosures. Granted, they didn't insure the worst of subprime, but at some point, they might hit a cash flow problem. When they do, refinancing in a credit crunch could make it a front-page story. At best, things don't look good.
Brilliant call, Steve.
For the record, he ended his second Ambac underperform pick in January at $8.36 a share, collecting a 71% gain on the virtual short. But he's not alone in wanting out. JPMorgan Chase yesterday copped to selling nearly all of its Ambac stake, as Foolish colleague Brian Pacampara reports here.
Worst
But our winner is Tween Brands, which on Thursday cut its first-quarter earnings guidance from a range of $0.35 to $0.40 a share to between $0.12 and $0.17 a share. That's at least a 50% haircut.
Management blamed poor execution at Limited Too, whose clothes have "not resonated" with customers, and stingy shoppers for the shortfall. Quoting CEO Mike Rayden from a company statement:
We believe customers are trading down in their apparel shopping, opting for lower price items or sale items and buying fewer of them. We've seen a much lower average transaction value in the first-quarter to-date versus last year.
Translation: Our customers don't really love our stuff but they'll buy it when it's on sale.
Tween Brands and the fickle female fashionistas who won't buy its clothes ... Thursday'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 Tuesday with more stock horror stories.
