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Today's 3 Worst Stocks

By John Divine - Apr 18, 2013 at 7:11PM

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Whether because of a lax approach to business, in general, rising costs, or a maturing enterprise, these stocks bit the dust Thursday

The S&P 500 Index (^GSPC 1.99%) has now fallen in four of the last five trading days, losing 3.25% of its value over the period. Given its blistering-hot start to the year, the market's cooldown shouldn't dismay or discourage long-term investors: the S&P has still seen 11.3% gains in the last year. That said, shareholders in three S&P components may consider changing their thesis on these stocks altogether. 

Flash memory producer SanDisk (NASDAQ: SNDK) committed a cardinal sin yesterday, announcing that it probably wouldn't be able to fill all its orders this year -- voluntarily. This blase philosophy -- in which SanDisk won't pay for more facilities to meet rising demand for its own product -- put an effective cap on its sales growth going forward, and the stock took a 6.6% shellacking because of it. 

Perhaps if SanDisk decides to try a little harder, it could pawn its wares through eBay (EBAY 3.71%), which could use some business of its own. Shares in the web-based auction site cratered 5.9% Thursday, as Wall Street was disappointed by slowing sales growth. Though 14% revenue growth in a wildly competitive environment like online retail ain't shabby, it's less than half the 29% pace seen a year ago. With PayPal sales growth also easing rapidly, it looks like the company may finally be reaching maturity. That's not necessarily a bad thing, but growth investors are leaving in hordes.

Lastly, homebuilder PulteGroup (PHM 4.68%) slipped 3.9% Thursday. While it didn't disappoint on earnings -- that won't be possible until next Thursday -- investors are realizing that the rising cost of materials could seriously impact margins. For example, plywood costs more than twice what it did just a year ago, lumber is up 120% from the lows of 2009, and drywall is 40% more expensive than it was last year.

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Stocks Mentioned

S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,057.84 (1.99%) $79.11
eBay Inc. Stock Quote
eBay Inc.
EBAY
$46.47 (3.71%) $1.66
PulteGroup, Inc. Stock Quote
PulteGroup, Inc.
PHM
$44.98 (4.68%) $2.01

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

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