24/7 Wall St. reviewed the performance of the 50 companies on our “Least Transparent” list for the month of June, and as might be expected, the returns were dreadful. In addition, three of the companies had high levels of “Insider Trading” during the month. The data for the original list and revisions come from Audit Integrity
Among the largest companies the average return was a negative 8.6% in June compared to a drop of 7.75% for the Russell 1000. The drop among smaller companies was more dramatic with an average return for June of a negative 13.83%. Only three stocks on the lists were up during the month.
“Least Trustworthy” refers to companies that have accounting and governance practices that pose risks to the company – and as a result, to shareholders. These practices include whether financial results may be misrepresented in public disclosures. According to Audit Integrity, “Accounting and governance practices have been shown to be highly predictive of negative events such as SEC enforcement actions, class action shareholder litigation and severe stock loss.
The information underscores the notion that companies with poor disclosure, accounting, and governance practices are viewed by Wall St. as poor investments.
Douglas A. McIntyre and Charles Stockdale
The 25 Least Transparent Large-Caps
| Company | Ticker | Price: May 28 | Price: June 30 | Variance % (Adjusted) |
|---|---|---|---|---|
| Altria Group, Inc. | MO | 20.29 | 20.04 | 0.49% |
| Apollo Group, Inc. | APOL | 53.16 | 42.47 | -20.11% |
| Bank of America Corporation | BAC | 15.74 | 14.37 | -8.65% |
| Carter’s, Inc. | CRI | 30.56 | 26.25 | -14.10% |
| Chesapeake Energy Corporation | CHK | 22.34 | 20.95 | -5.89% |
| Citigroup Inc. | C | 3.96 | 3.76 | -5.05% |
| Compuware Corporation | CPWR | 8.19 | 7.98 | -2.56% |
| Fiserv, Inc. | FISV | 47.55 | 45.66 | -3.97% |
| General Mills, Inc. | GIS | 35.62 | 35.52 | -0.27% |
| Goldman Sachs Group, Inc. | GS | 144.26 | 131.27 | -9.00% |
| Hewlett-Packard Company | HPQ | 46.01 | 43.28 | -5.77% |
| IAC/InterActiveCorp | IACI | 23.455 | 21.97 | -6.33% |
| McCormick & Company, Incorporated | MKC | 38.57 | 37.96 | -1.58% |
| Merck & Co., Inc. | MRK | 33.69 | 34.97 | 4.93% |
| Monsanto Company | MON | 50.87 | 46.22 | -9.14% |
| NuVasive, Inc. | NUVA | 39.27 | 35.46 | -9.70% |
| Pfizer Inc. | PFE | 15.23 | 14.26 | -6.37% |
| Plains Exploration & Production Company | PXP | 22.1 | 20.61 | -6.74% |
| PulteGroup, Inc. | PHM | 11.14 | 8.28 | -25.67% |
| Steel Dynamics, Inc. | STLD | 14.67 | 13.19 | -9.60% |
| Synutra International, Inc. | SYUT | 19.76 | 16.17 | -18.17% |
| Terex Corporation | TEX | 21.76 | 18.74 | -13.88% |
| Tutor Perini Corporation* | TPC | 22.3 | 16.48 | -26.10% |
| Warner Chilcott Plc | WCRX | 23.12 | 22.85 | -1.17% |
| Wells Fargo & Company | WFC | 28.69 | 25.6 | -10.77% |
| WatchList Companies Return, June: | -8.61% | |||
| Russell 1000 Return, June: | -7.75% |
The 25 Least Transparent Small-Caps
| Company | Ticker | Price: May 28 | Price: June 30 | Variance % (Adjusted) |
|---|---|---|---|---|
| Air Transport Services Group Inc. | ATSG | 5.62 | 4.76 | -15.30% |
| American Dairy, Inc. | ADY | 16.94 | 15.95 | -5.84% |
| Belo Corp.* | BLC | 7.27 | 5.69 | -21.73% |
| China Information Security Tech, Inc. | CPBY | 5.3 | 5.2 | -1.89% |
| China Security & Surveillance Tech. Inc. | CSR | 4.68 | 4.62 | -1.28% |
| Clinical Data, Inc. | CLDA | 16.47 | 12.44 | -24.47% |
| Dolan Media Company | DM | 12.3 | 11.12 | -9.59% |
| Flagstar Bancorp, Inc. | FBC | 5.08 | 3.14 | -38.19% |
| FreightCar America, Inc. | RAIL | 26.82 | 22.62 | -15.66% |
| Headwaters Incorporated | HW | 3.95 | 2.84 | -28.10% |
| Home System Group | HSYT | 4.65 | 4.4 | -5.38% |
| Huron Consulting Group | HURN | 23.42 | 19.41 | -17.12% |
| Kaiser Aluminum Corp. | KALU | 37.43 | 34.67 | -7.37% |
| KapStone Paper and Packaging Corp. | KS | 11.05 | 11.14 | 0.81% |
| Kenexa Corporation | KNXA | 14.23 | 12 | -15.67% |
| Navios Maritime Holdings Inc. | NM | 6.13 | 4.67 | -23.01% |
| Rudolph Technologies, Inc. | RTEC | 8.88 | 7.55 | -14.98% |
| Sequenom, Inc. | SQNM | 6.13 | 5.91 | -3.59% |
| Skilled Healthcare Group, Inc. | SKH | 8.23 | 6.79 | -17.50% |
| SkyWest, Inc. | SKYW | 14.665 | 12.22 | -16.41% |
| TeleCommunication Systems, Inc.* | TSYS | 5.01 | 4.14 | -17.37% |
| United Online, Inc. | UNTD | 6.815 | 5.76 | -15.48% |
| UTStarcom, Inc. | UTSI | 2.06 | 1.84 | -10.68% |
| Wonder Auto Technology, Inc. | WATG | 8.31 | 7.32 | -11.91% |
| Yongye International, Inc. | YONG | 7.49 | 6.89 | -8.01% |
| WatchList Companies Return, June: | -13.83% | |||
| Russell 1000 Return, June: | -7.75% |
*flagged in June for insider trading
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