Festivus in July:The Airing of Grievances

By AnnaLisa Kraft - July 20, 2012 | Tickers: BBRY, CHK, DECK, GMCR, ZNGA | 0 Comments

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If you’re a 'Seinfeld' fan you are already aware of Festivus, the alternative holiday to Christmas celebrated on December 23 and featuring such Festivus traditions as, the unadorned aluminum Festivus pole, 'Feats of Strength’, the unexplained coincidences that are called ‘Festivus Miracles’ and finally, 'The Airing of Grievances’ in which all at the holiday meal recount how the others have disappointed them over the last year.  So, unlike all the Christmas in July articles that come out about this time, here is one featuring stocks which have sorely disappointed their shareholders over the last year. On with ‘The Airing of Grievances’ over these ten stocks in no particular order that have some ‘splainin’ to do.

1. Research In Motion Limited (NASDAQ: BBRY) This one has delayed its new phone launch twice, replaced CEO’s and just today lost a patent infringement lawsuit to the tune of $147.2 million with more penalties probably coming. Over two years its share price has plummeted from $70 to $7. 
2. Chesapeake Energy Corporation (NYSE: CHK) Shareholders have every right to be disgruntled with maverick CEO Aubrey McClendon’s racking up massive debt in a multi-year multi-billion dollar land grab as the board let it slide with a wink and a nod. After the share price sank to 13 dollars from the 30’s, activist  shareholder Carl Icahn finally stepped in. The share price has recovered somewhat and still has a 1.8% yield.
3. Zynga Inc (NASDAQ: ZNGA) Another 52 week low for this recent IPO that really accelerated its plunge the day of the Facebook IPO.  From $15.91 to under $5.00 in a matter of months and making new 52 week lows ‘virtually’ every day, this gaming company is perceived to have its fortunes tethered to Facebook and also to have overpaid for OMGPOP, a one game company. Shareholders keep hoping for an angel buyout , online casino gaming partnership or a “Festivus” miracle.
4. SUPERVALU, Inc Having your name in all caps can’t save Supervalu from yet another 52 week low of $2.25 after a 50% loss of market cap last week or a loss from $70 a share in 2007 to today’s ignominious numbers. The dividend has been cut and it is exploring selling itself. To be fair, supermarkets are a razor thin margin model if you care to look at competitor Safeway’s chart. Then, look away, it ain’t pretty.
5. J.C. Penney Company, Inc Another one on the 52 week low list, now at $19.43 from $43.18, because of CEO Ron Johnson’s confusing pricing changes as well as an inability to keep the existing customer base while not attracting a new demographic. Changing the image of this stolid retailer will be a ‘Feat of Strength.’ Still it has a 4% dividend but what good does that do if it reports even worse numbers than the current -1.77 per share?
6. Deckers Outdoor Corp  (NASDAQ: DECK) Once the darling of Wall Street, this shoe company broke shareholder hearts when it drooped over the last eight months from $118.90 to $42.16.  Rising costs of materials, weather excuses and copycat UGGS all over the place prompted the ‘axe’ shoe analyst to cut numbers last fall. The stock now trades at  much more reasonable 9.79 P/E. CEO Angel Martinez bought himself a signicant position last week boosting the share price and somewhat cheering long-suffering shareholders.
7. RadioShack Corp Bumping along its 52 week low of $3.67 from $16.25 even what is now a 12.80% dividend can’t attract investors to what is a dying business model with humongous competitors  like Best Buy, Wal-Mart and Target not to mention the Verizon and AT&T stores. Again this yield is useless if the stock goes down further or if it cuts it entirely.     
8. Groupon, Inc This one is just sad. The list of competitors in this space is so numerous and it’s so easy to start a Groupon like service that its most well known competitor, Living Social, decided not to go public after all and have to answer to ticked-off investors. In an interesting development the CEO is moonlighting at a Japanese restaurant to help figure out how Groupon can help small businesses. I won’t be the one to muse about further career opportunities for CEO Andrew Mason if this stock goes below $7 from its high of $31.14.     
9. Green Mountain Coffee Roasters Inc (NASDAQ: GMCR) And another one bites the dust of a new 52 week low. From $115.98 to $17.66 intraday. One would think a razor and blade model like the Keurig  machine and K-Cup coffees would work, right? But constant questions over accounting and inventory numbers as well as its former BFF Starbucks planning to introduce its own coffee machine and coffees have brought this one down  to a P/E of 8.60 and almost to value stock territory.
10. Chinese Internet Stocks  All of them, even Baidu, Inc have fallen at least 30% since last summer.  Baidu falling from a high of $165.00 to a 52-week low of $99.71 intraday. Sina, Sohu, RenRen, Youku and Toudu all have slumped because of the Chinese economy, government censorship and accounting scandals with other Chinese sector stocks. These may not deserve their drops as much as the rest but if you’re not disgruntled with their stock performance (and what would Seinfeld say about a gruntled person?) then how could we have a true Festivus meal?

A few of these may have hit bottoms but some are certainly headed lower. Do you really want to catch the falling Festivus meat carving knife?  It may be a ‘Feat of Strength’ to dump some of these but an even more foolish feat to short them as short interest has been declining in most of these as they’ve already been picked over like the proverbial holiday carcass. ( Meatloaf, however is the usual Festivus fare). Some of these shouldn’t be touched with a ten foot aluminum Festivus pole.  It’s time to move on and start finding some winners. Happy Festivus in July to you!

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