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This Week's 5 Dumbest Stock Moves

By Rick Munarriz - Feb 21, 2014 at 4:43PM

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These five companies got it wrong this week.

Stupidity is contagious -- even respectable companies can catch it. As we do every week, let's take a look at five dumb financial events this week that may make your head spin.

1. Conn's job
Conn's (CONN -5.98%) became the latest consumer electronics retailer to implode after warning of a weak holiday quarter. Investors probably should have seen this coming, as not one but two of its publicly traded peers tanked earlier this year on similar warnings.

However, a big reason why its dreary preview resulted in the stock cratering 43% on Thursday is that the seller of consumer electronics, furniture, and appliances also provides in-house consumer credit -- and it's got a lot of deadbeat buyers. Conn's loan delinquency rate for customers who are at least 60 days late on their payments has ballooned to 8.8%.

Ouch!

2. Youku oh no 
Youku Tudou
 (NYSE: YOKU) was on the losing end of an analyst downgrade this week. Maxim's Echo He lowered his rating on the leading Chinese player in streaming video from hold to sell. 

Rivals have been snapping up exclusive rights to magnetic content, and He feels as if the marketplace is growing competitive enough for margins to suffer. He's price target of $24 is well below where the stock is at the moment.

It's a gutsy move to downgrade the stock, since Youku will report quarterly results next week. 

3. Millennial falcon 
Millennial Media 
(NYSE: MM) had a solid holiday quarter, but 2014 is shaping up to be a different story. The fast-growing mobile marketer that fuels display ads for 50,000 popular apps is forecasting revenue to clock in between $72 million and $76 million, well short of the $109.5 million it rang up during the seasonally potent holiday quarter and shy of the $83.3 million that analysts were projecting.

Growth is decelerating, and profitability continues to be a challenge. 

4. Sam Walton wouldn't be impressed
This hasn't been much of an economic recovery for Wal-Mart (WMT 0.87%). The leading discounter has been posting way too many quarters with negative comps in recent years, and it did it again during the holiday quarter.

Wal-Mart saw comps at its stateside stores slide 0.4% during the fourth quarter. 

The world's largest retailer has been targeting a bounce in the new fiscal year, but it's now starting to scale back expectations. In October it was forecasting sales to climb 3% to 5% this year, and now it's guiding analysts to eye the lower end of that range.

5. Gym neighbors
Working out isn't working out for Town Sports International (CLUB 6.67%). The company behind the Sports Clubs gyms closed out 2013 with 13,000 fewer members than it had a year earlier. 

It essentially broke even on a slight decline in revenue, and Town Sports is forecasting more of the same for the current quarter. That's not sitting well with analysts, who were aiming for a profit of $0.17 a share on merely flat top-line growth. Piper Jaffray and Wedbush went on to downgrade the shares, in a sense rescinding their gym memberships.

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Stocks Mentioned

Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
WMT
$123.67 (0.87%) $1.07
Conn's, Inc. Stock Quote
Conn's, Inc.
CONN
$11.48 (-5.98%) $0.73
Town Sports International Stock Quote
Town Sports International
CLUB
$0.00 (6.67%) $0.00

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

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