MILLBURN, N.J. (Stockpickr) -- Companies, unlike members of the animal kingdom, can theoretically live forever. But a company's CEO, the person in charge of the day-to-day operations of the company, is human, and his or her time at the top is finite.
Issues always arise for both the company's management and shareholders as to what to do when a CEO leaves, whether the departure is planned or not. While the board of directors will ultimately make the decision as to whom to appoint as the CEO, investors, in my opinion, invest as much in the company's management as they do in the company's stock.
So when a CEO change is made, we must look carefully at a stock and decide whether or not the CEO change is a material event that necessitates action on our part. Sometimes a new CEO spells trouble or the continuation of problems for a company. Other times a new CEO might bring a refreshing change or opportunity for a turnaround to a company, as it did for Ford (F) when Alan Mullaly took over the reins at the automobile manufacturer. Quite often, new CEOs are merely another step in a line of successful managers who help to steer the company to even greater heights.We've already taken a look at five CEOs who are making their companies' stocks attractive to investors, in "5 Stocks With New CEOs to Stick With." Now let's take a look at five stocks with new CEOs that investors should avoid.
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