Thursday's Worst Stocks in the World

Bad days. We all have them; some of us deserve them. Here are five stocks whose naughty ways drew investors' scorn on Thursday:

Naughty?
Well, OK, we can't exactly call these stocks naughty. There are days when five-star winners and newsletter recommendations appear here. Today, sadly, is one of those days.

But if you're an investor, you'll have plenty of bad days. The trick is to avoid dating -- or, worse, marrying -- your losers. That's why I listen when our 100,000-person-strong Motley Fool CAPS community of stock pickers speaks with a poor rating or a negative pitch. You should listen, too.

Thus, here is today's list of the worst stocks in the world.

Worse
We begin with Secure Computing, which yesterday afternoon made good on last month's promise to deliver awful results in its first quarter.

What worries me more is the second-quarter outlook. Management says cash from operations -- a staple of the business and key to my investment thesis -- will drop from its recent range of $10 million to $13 million down to $3 million to $4 million. Billings, meanwhile, are expected to rise only slightly.

Blame the feds. CFO Tim Steinkopf told me in an interview earlier today that defense budgets are tightening because of the demands of the war in Iraq. Uh-oh.

Worser
Next up is Sun Microsystems, which also reported awful fiscal third-quarter results last night. The result? Layoffs. Lots and lots of layoffs. Quoting CFO Michael Lehman from yesterday's call with analysts and investors: "In Q4, we intend to take a restructuring charge between $130 million and $220 million. The actions include a reduction in force of approximately 1,500 to 2,500 people."

Oh, goody.

But it gets worse. U.S. revenue, which Sun says historically accounts for 40% of the total, declined 10% during the quarter. Gains elsewhere weren't enough to recoup the difference, Lehman said.

Call it the "economy ate my earnings" excuse.

Or ... don't. Not everyone is taking a hit here in the States. Sun peer IBM (NYSE: IBM), for example. Big Blue reported a 6.5% gain in U.S. revenue thanks to new System z mainframes.

Worst
But our winner is Elizabeth Arden, which you'd think would have a nearly recession-proof business in cosmetics, right? Not today.

Revenue fell 4% before accounting for currency gains. Excluding them, revenue was down 5.9%. On the bottom line, a net gain of $0.11 per share a year ago became a $0.10 loss in this year's fiscal Q3, excluding restructuring charges.

Analysts, on average, were expecting a $0.07-per-share gain. That they were off by that much suggests to me that no one -- not even management -- predicted this much deterioration in the core business.

And they still don't. Quoting CEO Scott Beattie in a company statement: "For the balance of the year, we remain cautious with respect to our business in North America and the developed markets in Europe."

Translation: We'll tell you what to expect as soon as we figure it out for ourselves.

Elizabeth Arden and its anyone-got-a-rag-so-I-can-clean-this-dirty-windshield outlook for the year ahead ... Thursday's Worst Stock in the CAPS world.

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I'll be back Tuesday with more stock horror stories.