4 Stocks Not to Buy

JCVD biting Snake

Feel like losing more money?  Mastery has 4 stocks that suck the big one.

What do Research in Motion (RIMM), Apollo Group (APOL), The Wendy's Company (WEN), and Green Mountain Coffee (GMCR) have in common?  How about a failing business model, pending lawsuits, no respect from Wall Street, and a beat-up share price.

Research in Motion (RIMM) is at $12.16 a share just 2% away from its 52-week low.  In the last year its shares have tanked 75% and consumers could care less about their products.  Everyone and their Mom has been rumored to buy this company however no one has stepped up to the table.  Today RIMM hit yet another 52-week low.  The Blackberry 10 failed to entice the world this week. Try getting a few good apps then maybe we will all listen.  Why doesn't somebody buy the company, put that wonderful keypad on its phones and call it day?  Avoid RIMM at all costs.

Apollo Group (APOL) sells fake degrees to suckers for a profit, it should have never traded publicly.  APOL is less than 2% from its 12 month low and YTD its lost 36%. Apollo Group's University of Phoenix has been accused of using used unfair or deceptive tactics to recruit students or in connection with student financial aid. President Obama is declaring was on Apollo Group and its friends.  He has called recruiting tactics of some schools trying sign up veterans "appalling," signed an order requiring more financial disclosure to protect military members and their families.
Last week via Bloomberg.com --
The order will limit recruiters’ access to military facilities and require schools to provide financial aid options. The government will also seek to halt improper use on websites of the term “GI Bill,” referring to the educational benefit program for veterans.
“Sometimes you’re dealing with folks who aren’t interested in helping you,” Obama told veterans, soldiers and their families at Fort Stewart in Hinesville, Georgia, home of the U.S. Army’s 3rd Infantry Division. “They don’t care about you, they care about the cash.”
...For-profit colleges such as Apollo Group Inc. (APOL) (APOL)’s University of Phoenix can get as much as 90 percent of their revenue from federal financial aid programs. Schools solicit troops partly because their government tuition programs are excluded from that cap.

Green Mountain Coffee (GMCR) shares are down 43% today and dropped far below its previous 12 month low of $34.06.  GMCR shares are at $28 after their horrible earnings call where they declared "We're Trying to Really Understand” Sales Shortfall. It doesn't get any better than that, thank you Green Mountain Management Team. GMCR said the growth trajectory for sales of its brewers and K-Cups could level off, yikes.  But wait..there's more!  CEO Larry Blanford replied, noting that weather during the quarter was "unseasonably warm." That hurt hot cocoa sales, which apparently came as a surprise to the company.
"We learned a lot that hot cocoa is very much temperature-sensitive," he said.  Seriously?

Mastery would love to say this stock could bounce but its a flaming falling knife for the time being. Its hard to buy a company that is confused about the science and spending of hot chocolate comsumers. Its a desperate plea for help that is worse than a canned message from R2-D2.

Last but not least is Wendy's (WEN) shares have crept down to within 11% of its 52-week low.  WEN is at $4.83 but does pay a 1.65% annual dividend yield.   Wendy's is no McDonalds (MCD) or Chipolte (CMG) and its share reflects that.  In the last two years Wendy's has traded between $5.60 and $4, never leaving that range.  However Wendy's does have some fans, namely Rocco Pendola.  Check out Wendy's May Be the Next Big Turnaround Story which he published on April 27th.  Despite WEN making our '4 Stocks Not to Buy', its the one company out of the list that could spark some interest.

MASTERY Bottom Line (Flying Kick Style)

MASTERY Bottom line:

All of these stocks are falling knives and should not be bought with the anticipation of a bounce. Of the entire list WEN is the most likely to make a comeback. The others are a waste of time and energy.














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 UOPX does not sell fake degrees, they hold regional accreditation from the Higher Learning Commission.  Graduation rates are between 30-40% when you look at the entire student population which competes with most institutional graduation rates. President Obama was talking about career colleges and they happen to be for-profit.  UOPX gets pulled into these types of discussions because they are the biggest kid in the room and not because they themselves are under scrutiny.  Lumping all for-profits in together is akin to lumping all non-profits in together: “Penn State faces a sexual abuse scandal which shocks the non-profit university world.  Non-profits, like Brown and CAL, have been under increasing scrutiny in relation to administrative accountability practices.”   President Obama never mentioned APOL or UOPX yet you put words in his mouth by stating “President Obama is declaring was on Apollo Group and its friends.”  President Obama never said anything of the like if you actually read the president’s speech and not just Bloomberg’s interpretation this would be apparent.  Did you know that President Obama’s Cyber-Security Coordinator is a University of Phoenix grad?  His UOPX credentials were good enough for Carnegie Mellon and the Obama administration but not the blogosphere.  Right.  Bloomberg only mentioned UOPX as an illustrative example to try and get some traction in the press and the blogosphere. 

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