These Stocks Make RIMM Look Good
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Research in Motion is the Rodney Dangerfield of the tech world. Missed opportunities, product delays and a general Keystone Kops atmosphere have combined to drive the company to its knees.
But sad as that might be, there are some dogs out there that make RIMM look stellar. The following stocks have lost more than 60% of their stock price this year, are awash in debt, and have a substantial amount of their outstanding stock held short.
In the world of razor-thin profit margins, grocery stores must maximize every sale to remain in business. Since January 1st, SuperValue’s (NYSE: SVU) stock price has dropped 70.9%, falling from $8.38 to the current $2.38.
SuperValue’s fiscal year revenue dropped from $37.534 billion in February 2011, to $36.100 billion in February 2012. Annual net income went from $393 million in 2010 to a net loss of -$1.040 billion in 2012. The company states cash at $151 million against debt of $6.54 billion. The companies’ ROE is a -145%, and the year-over-year quarterly growth is -44.60%.
This past July, the company hired Wayne Sales as CEO to help fix the broken company. Kevin Holt, who was just hired in May, was recently promoted to president of the retail division. Management changes continue being implemented in an effort to halt the stock’s continuing fall. But with 40.6% of SuperValue’s outstanding stock held short as of August 30th, the company might have spiraled down too far for any changes to help.
Alpha Natural Resources (NYSE: ANR) produces, processes and sells steam and metallurgical coal from their mining operations. The stock price fell 70.9% this year from January’s $22.31 to the current $5.94, and as of August 30th, 15.9% of the shares outstanding were held short.
Although annual revenue increased from $3.917 billion in 2010 to $7.109 billion in 2011, net income took a hard fall from $95.5 million to a net loss of -$677.4 million, respectively. Debt reported as $2.99 billion dwarfs Alpha Natural’s cash of $353.30 million. The company currently runs a negative -36.81% profit margin and has a ROE of -43.62%.
Alpha Natural recently decided to close several mines and reduced hours and/or crews to decrease coal production. The Energy Information Administration forecasts that coal-fired electrical generation will decrease at least 3.1% through 2015. The company is looking at overseas markets to make up for their falling revenue, but until the domestic demand for coal significantly increases, they may have to report another loss at their October 29th earnings conference.
Bottoming out the list is Nll Holdings (NASDAQ: NIHD), a company that provides mobile communications for business customers in South America. The company’s stock price has plummeted 71.6% since January, falling from $21.97 down to $6.24 and, on August 30th, saw 25.8% of their outstanding stock held short.
Although annual revenue rose in 2010 from $5.601 billion to $6.719 billion in 2011, net income fell from $341 million to $198.8 million, respectively. The company reports cash of $1.96 billion against $4.62 billion of debt. Nll has a ROE of -3.38%, and the quarterly y-o-y revenue growth was pegged at -14.70%.
Recently Nll’s corporate credit rating was downgraded by Standard & Poor’s Rating Service from “B+” to “B”, and the senior unsecured debt was lowered from “B” to “B-”. The company’s subscriber base fell from 1.4 million to 1 million for fiscal year 2012, and subscriber usage continues to decrease. Nll is also dealing with increased costs in launching their 3G network and face formidable competition from America Movil S.A.B and Telefonica S.A. The company’s next scheduled earnings report is set for October 22, 2012.
It falls to the individual investor to decide if these beaten down stocks are dogs to short or diamonds-in-the-rough to buy. But either way, their woeful condition continues to make RIMM look like the buy of the decade.
kprogers has no positions in the stocks mentioned above. The Motley Fool owns shares of SUPERVALU INC. 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.If you have questions about this post or the Fool’s blog network, click here for information.