This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Weak Leadership: 5 Companies To Avoid

Stocks in this article: AVP BBY CHK HPQ NFLX RIMM ZNGA

11-time author and professor at Dartmouth College’s Tuck School of Business listed five companies having the worst CEOs in 2012. The top companies listed for 2012 were:

1. Best Buy Co. Inc. ( BBY): Operates as a retailer of consumer electronics, home office products, entertainment products, appliances, and related services primarily in the United States, Europe, Canada, and China. Market cap at $3.89B

2. Chesapeake Energy Corporation ( CHK): Engages in the acquisition, development, exploration, and production of natural gas and oil properties in the United States. Market cap at $11.21B.

3. Avon Products Inc. ( AVP): Engages in manufacturing and marketing beauty and related products in worldwide. Market cap at $6.11B.

4. Zynga, Inc. ( ZNGA): The Company develops online games designed for play on social networking sites. Market cap at $1.9B.

5.Bankia SA. ( BNKXF): provides banking services to individuals, small and medium enterprises, large corporations, and public and private institutions in Spain.

 

Last year, the companies listed included:

1. Netflix, Inc. ( NFLX): Provides subscription based Internet services for TV shows and movies in the United States and internationally. Market cap at $5.03B.

2. Research In Motion Limited ( RIMM): Designs, manufactures, and markets wireless solutions for the worldwide mobile communications market. Market cap at $6.16B.

3. Hewlett-Packard Company ( HPQ): Offers various products, technologies, software, solutions, and services to individual consumers and small- and medium-sized businesses (SMBs), as well as to the government, health, and education sectors worldwide. Market cap at $27.6B.

 

There are things more risky than leadership for a company’s prospects, such as politics (policy) and the stability of a country. After that, leadership can mean enormous growth or catastrophic failure.

The companies listed for 2012 are worth studying. Growth in online shopping is hurting same store sales for  Best Buy. Its  Price of Profitability (as measured by Kapitall) now stands at just 5.  Avon (AVP) did not improve shareholder value after turning down a takeover offer this year. The company is now worth $6 billion.

In the resource sector, the natural gas price plunge that continued from 2011 turned leveraged assets into liabilities for  Chesapeake (CHK).

Unsurprisingly,  Zynga (ZNGA)’s CEO made the list after its shares lost investors an enormous amount of money. The ill-timed strategic divesture from  Facebook (FB) is putting pressure on the company to grow in other markets. Zynga now needs to grow in the mobile space, at a time when profits in this space is itself a challenge – unless the game is a hit.

In the Spanish market,  Bankia (BNKXF) earned a worst CEO title. The chairman, Rodrigo Rato, is being investigated for fraud.

Written by KAPITALL’s Chris Lau

 

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,191.37 -195.84 -1.13%
S&P 500 2,002.16 -27.39 -1.35%
NASDAQ 4,637.9940 -43.5030 -0.93%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs