Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Web services specialist AOL (NYSE: AOL) has received the dreaded one-star ranking.

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

AOL facts

Headquarters (Founded) New York (1985)
Market Cap $2.5 billion
Industry Internet software and services
Trailing-12-Month Revenue $2.65 billion
Management

Chairman/CEO Tim Armstrong

CFO Arthur Minson

Trailing-12-Month Return on Equity (34.4%)
Cash/Debt $623.3 million / $82.6 million
Competitors

Google (Nasdaq: GOOG)

Microsoft (Nasdaq: MSFT)

Viacom (NYSE: VIA)


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

On CAPS, 67% of the 151 members who have rated AOL believe the stock will underperform the S&P 500 going forward. These bears include MajorBob04 and All-Star XpXp, who is ranked in the top 2% of our community.

Just last month, MajorBob04 touched on AOL's particularly dim prospects: "Maybe there's some value in their advertising businesses and acquiring their dwindling subscriber base but there isn't much to be optimistic about."

AOL's steadily declining user base and weakened brand continue to worry our CAPS community. Over the next five years, AOL's profits are expected to decline (-8% per annum), while Internet rivals Google (18.1%) and Microsoft (11.3%), as well as media foes like Viacom (13.3%) and Walt Disney (NYSE: DIS) (11.4%), are all expected to grow at double-digit rates.

CAPS All-Star XpXp expands on the bear case:

I am mildly bearish on AOL. ISP and search revenues will continue to decline. All of the AOL branded properties have the AOL stigmatization. I do not believe Engadget, StudioNow, and MapQuest justify current valuation. Nevertheless the [company's] real assets probably justify two thirds of current valuation. If new management can pull off a turn around and transform the company into a group of thriving 21st century web businesses, current levels may eventually look attractive.

What do you think about AOL, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Google is a Motley Fool Inside Value and Rule Breakers recommendation. Microsoft is an Inside Value pick, and Motley Fool Options has recommended a diagonal call position on it. Walt Disney is an Inside Value and Stock Advisor selection. The Fool owns shares of Google and Microsoft. Try any of our Foolish newsletter services free for 30 days.

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