Please ensure Javascript is enabled for purposes of website accessibility

1-Star Stocks Doomed to Drop: Blockbuster

By Brian D. Pacampara, CFA - Updated Apr 5, 2017 at 8:07PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Market-lagging returns could be written in this 1-star.

Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, video rental chain Blockbuster (NYSE:BBI) has received the dreaded one-star ranking. Our data has shown that one-star stocks woefully lag the market average; conversely, five-star stocks outperform the S&P by a significant margin.

With that in mind, let's take a closer look at Blockbuster's business and see what CAPS investors are saying about the stock right now.

Blockbuster facts

Headquarters (Founded)

Dallas (1982)

Market Cap

$229.4 Million


Specialty Stores

Trailing-12-Month Revenue

$5.48 Billion


CEO James Keyes (since 2007)

CFO Thomas Casey (since 2007)

Compound Annual Revenue Growth (Past Three Years and Year-Over-Year)

(3.0%) and 0.2%



CAPS Members Bearish on BBI Also Bearish on:

General Motors (NYSE:GM)

Ford Motor (NYSE:F)

CAPS Members Bullish on BBI Also Bullish on:


Microsoft (NASDAQ:MSFT)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

Over on CAPS, 752 of the 1,469 members who have rated Blockbuster -- some 51% -- believe the stock will underperform the S&P 500 going forward. These Fools include CAPS All-Star willmaster01 and stan8331.

Just last week, willmaster01 made a Web-based bear argument: "Who doesn't download free movies online. Until they get net neutrality sorted out or some other means of enforcing non piracy, this company is down and out [for the] same reason record companies are feeling the pinch."

In a pitch two weeks earlier, stan8331 tapped Blockbuster as a scary story in the making:

If they're incapable of competing with Netflix, I see no future for Blockbuster. Their brick and mortar dvd rental business was profitable when there weren't cheap, easy alternatives. Online streaming is the wave of the future for instant access, otherwise Netflix gets dvd's to you at a very fast rate via U.S. mail. Basing your whole business model on convincing people to spend gas driving to your store in order to pay $4 tax to rent a single DVD (and then spend more gas to drop it off) is a recipe for bankruptcy.

What do you think about Blockbuster, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Netflix, Amazon, and Apple are Motley Fool Stock Advisor picks. Microsoft is a selection of Inside Value. The Fool's disclosure policy always gets a perfect score.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Netflix, Inc. Stock Quote
Netflix, Inc.
$242.70 (-0.58%) $-1.41
Microsoft Corporation Stock Quote
Microsoft Corporation
$287.02 (-0.74%) $-2.14
Apple Inc. Stock Quote
Apple Inc.
$168.49 (-0.44%) $0.75
Ford Motor Company Stock Quote
Ford Motor Company
$15.83 (2.13%) $0.33, Inc. Stock Quote, Inc.
$140.64 (-1.44%) $-2.05
General Motors Company Stock Quote
General Motors Company
$38.46 (1.34%) $0.51

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.