3 Downtrending Stocks to Avoid

How can anyone make that claim? The stock is down 19% year-to-date, and the shares have broken all yearly support levels. If Cisco continues to trend lower and breaks $17 a share, look out below, because the next level of support won't come in until around $14 a share.

Keep in mind that shares of Cisco are now down 60% in the last 10 years. What about a stock being down horribly in the short and the long term makes it a great stock to own? My take here is that Cisco has become too big to sustain a growth rate that investors want to see for high-growth stocks. Also, the company just hasn't been innovative enough and changing with technology to excite investors into wanting to own the shares. Compare Cisco Systems with competitor Juniper Networks (JNPR), which is trading near a 52-week high and is up 31% in 2010. Juniper has been the far better investment and will probably continue to be.

>>Also: Stock Doppelgangers: Proceed With Caution

One final stock that is trending in the wrong direction and trading near 52-week lows is private education provider Apollo Group (APOL). There are so many issues with this stock that I don't even know where to begin.

First, you have government intervention, which has created a lot of uncertainly in the student loan market. Then we have issues with the Department of Education probing the for-profit schools for fraudulent practices in student recruitment and financial aid. On top of all of that, we have issues with whether or not students who actually go to these for-profit schools receive degrees and get jobs that made their experience worth the cost.

>>Who Owns Apollo Group?: Maverick Capital

And in a recent think tank report, the University of Phoenix, which is part of the Apollo Group, was singled out for its low graduation rates, which were reported to be in the single digits on some campuses.

Just this week, Apollo Group confirmed that it has eliminated 700 full-time positions at its University of Phoenix facilities throughout the nation. Something must be wrong at Apollo for the company to cut that many jobs, with most of those job cuts coming in the company's admissions personnel department. If they're eliminating people in the admissions department, that tells me that demand is going down for students who actually want to attend their schools.

>>Also: 10 Worst-Performing S&P 500 Stocks of 2010

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