The house rules are simple in this weekly column.

I bash a stock that I think is heading lower. I offset the sting by recommending three stocks as portfolio replacements.

Who gets tossed out this week? Come on down, Sony (NYSE: SNE).

Only the Sony can play
Shares of Sony are rocking higher this morning, bouncing back after getting pounded on Thursday on the heels of a nasty quarterly report.

It could be that investors are starting to rally around the board announcement earlier this week that cost-cutting insider Kazuo Hirai will be taking over as the troubled consumer electronic giant's new CEO.

Yes, he's an insider. Yes, he was heading up the PlayStation division that has lost ground in recent years. However, everything that I've read on Hirai makes it seem as if he's the bold free thinker that Sony needs if it wants to stick around after three brutal years of losses.

I'm applauding the Hirai move, but it really doesn't matter. Even Steve Jobs couldn't save Sony now.

Let's analyze Sony's business. In its prime, PlayStation was a huge contributor to Sony's bottom line. Well, Sony's no longer the top dog in video game consoles. The fact that it has resorted to margin-slashing console price cuts to even remain somewhat relevant in this niche really only makes matters worse.

If I asked an audience of die-hard gamers to raise their hands if they think this month's PS Vita has a shot at its $250 price point, I wouldn't crowd surf in that bunch. I would drop -- and so will Sony's handheld device.

Sony is best known for its consumer electronics, but that's an even uglier realm. Its once-bread-and-butter TV business has posted seven consecutive years of losses. Sony's exports are obviously stinging from the strong Japanese yen, but one would have to be naive to think that Sony can return to prominence there.

Why buy a Sony Blu-ray player when streaming is the future? Why buy a Sony camera or camcorder when casual users may be just fine with the improving quality of smartphone cameras and the wider accessibility to online data storage? Who needs Sony audio components, when we live in Pandora's (NYSE: P) world? Instead of cranking out our music for all to hear, we let Pandora and other streaming audio sites provide customized playlists into our earbuds. Sony makes a great laptop, but global PC sales stalled last year as consumers turn to "good enough" mobile phones and tablets.

One can argue that Sony is lucky enough to have a strong presence in video and audio entertainment, but Sony's history of overprotecting its media has backfired. Sony's inability to weave content and hardware together in a market-acceptable manner has been catastrophic, and now it's too late to change that.

Sony joined hard-drive makers, PC companies, and automakers yesterday in blaming last year's flooding in Thailand for supply chain and manufacturing woes. In Sony's case it's a scapegoat. The others can't get their product out quickly enough. Sony still can't find buyers. Revenue doesn't tumble 17% unless you're doing something wrong.

I've seen enough. I'm initiating a bearish CAPScall on Sony this morning.

Good news
As I do every week, I don't talk down a stock unless I have three alternatives that I believe will outperform the company getting the heave-ho. Let's go over the three fill-ins.

•  Apple (Nasdaq: AAPL): I have a Sony Bravia television in my living room, and I got a great deal on a Sony Google TV for my bedroom. I'm already suffering from buyer's remorse in anticipation of what Apple will do to raise the bar in this industry that is so ripe for disrupting. Apple is eating Sony's lunch everywhere. When the PS Vita flops -- and it will -- you can thank folks sidestepping the Vita's killer specs for the convenience and simplicity of the scaled-down portable gaming available through Apple iPods, iPhones, and iPads. Compare Sony's quarter this week to Apple's blowout results last week. Consumer electronics are alive and well, but only if they are being cranked out by the world's most valuable tech company.

•  Microsoft (Nasdaq: MSFT): I didn't think I'd see the day when Apple and Microsoft are fitting portfolio replacements, but Mr. Softy has smoked Sony out of the water on the console gaming front. The Xbox 360 sold nearly as many systems as the Wii and PS3 combined! Apple and Microsoft are also both trading for 11 times this fiscal year's projected profitability and 10 times next year's target. It's a good time to get into either company.

•  Netflix (Nasdaq: NFLX): Another dagger in Sony's gut has come from Netflix. Really. Netflix served up 2 billion hours of digital video to its 23.5 million global streaming subscribers this past quarter alone. Serving content from the cloud means that they don't need to buy Sony DVDs or even Sony optical disc players. There may come a time when Sony can cash in on its studio vault, but select Sony new releases were pulled from Netflix's streaming service last year. Do you think couch potatoes care? They'll just watch something else. There will come a time when Sony will effectively monetize its enviable catalog, but by then the playing field will be too level to matter.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for Netflix. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

The Motley Fool owns shares of Apple and Microsoft. Motley Fool newsletter services have recommended buying shares of Apple, Microsoft, and Netflix. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.