Wednesday, January 21, 2015

Today's 3 Worst Stocks

After slipping yesterday on fears that the Federal Reserve would temper the pace of bond-buying, Wall Street reversed its position, gaining ground as poor economic indicators made continued Fed intervention more likely. The S&P 500 Index (SNPINDEX: ^GSPC  ) tacked on 6 points, or 0.4%, to end at 1,654. Not only did the following three companies fail to recover from Wednesday's market decline, but they also ended as the three worst performers in the entire 500-company index.

Weyerhaeuser (NYSE: WY  ) , which also earned a spot on this ignominious list yesterday, fell 2.9% today. Shares in the company -- which grows and harvests trees, as well as provides end-products such as beams, framing products, decking, insulation, rebar, and plywood -- have fallen four of the past five days. As you can imagine, the company is sensitive to changes in the housing market, and with April's pending home sales growth trailing estimates by 1.2%, investors may be concerned with growth expectations. 

Plum Creek Timber (NYSE: PCL  ) , which, like Weyerhaeuser, is also a REIT with a main focus on -- you guessed it -- timber products, fell 2.5% today. The uber-short-term performance of Plum Creek has also been dismal, with shares slumping more than 8% in the past five days alone. But just last week, shares reached a 52-week high, and why shouldn't they have? A recovery in the housing market is well under way; as the resurgence continues, companies such as Plum Creek Timber and Weyerhaeuser will be there to benefit.

Lastly, Kraft Foods (NASDAQ: KRFT  ) slipped 2.3% Thursday. The food giant has refocused its business since last year, spinning off the snack-foods division, Mondelez into a company of its own. The split was intended to give each company a more entrepreneurial spirit, and since the decision, Kraft shares have doubled the returns of the Dow. With a well-established brand, a dividend that stands at 3.5%, and a new strategy that seems to be working, Kraft actually doesn't have any major problems threatening its future.

Kraft Foods Group is entering a new era after its recent corporate breakup. Its brand power is indisputable and its market share dominates, but Kraft's growth potential is limited, and its heavily commoditized categories face massive pressures. In The Motley Fool's premium report on the company, we guide you through everything you need to know about Kraft, including the key opportunities and threats facing the company. To get started, simply click here now.

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