24/7 Wall St. revised our list of the 50 “Least Transparent” companies for the month of July, and as might be expected, the returns were still dreadful. In addition, five of the companies had high levels of “Insider Trading” during the period. The data for the original list and revisions come from Audit Integrity.
Among the largest companies, the average return was a negative 7.72% from May 28 to August 30, compared to a drop of 1.45% for the Russell 1000. The drop among smaller companies was more dramatic with an average return for the same period of negative 17.55%. Only twelve of the fifty stocks on the lists were up during this time.
“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: August 31 | 3-month Variance % (Adjusted) |
|---|---|---|---|---|
| Altria Group, Inc. | MO | 20.29 | 22.32 | 11.92% |
| Apollo Group, Inc. | APOL | 53.16 | 42.49 | -20.07% |
| Bank of America Corporation | BAC | 15.74 | 12.46 | -20.79% |
| Carter’s, Inc. | CRI | 30.56 | 22.34 | -26.90% |
| Chesapeake Energy Corporation | CHK | 22.34 | 20.68 | -7.10% |
| Citigroup Inc. | C | 3.96 | 3.71 | -6.34% |
| Compuware Corporation | CPWR | 8.19 | 7.17 | -12.45% |
| Fiserv, Inc. | FISV | 47.55 | 50.01 | 5.17% |
| General Mills, Inc. | GIS | 71.23 | 36.16 | 2.30% |
| Goldman Sachs Group, Inc. | GS | 144.26 | 136.93 | -4.84% |
| Hewlett-Packard Company | HPQ | 46.01 | 38.45 | -16.29% |
| IAC/InterActiveCorp * | IACI | 23.46 | 24.78 | 5.65% |
| McCormick & Company, Incorporated | MKC | 38.57 | 39.87 | 4.08% |
| Merck & Co., Inc. | MRK | 33.69 | 35.16 | 5.50% |
| Monsanto Company | MON | 50.87 | 52.65 | 4.08% |
| NuVasive, Inc. | NUVA | 39.27 | 29.35 | -25.26% |
| Pfizer Inc. | PFE | 15.23 | 15.91 | 5.61% |
| Plains Exploration & Production Company | PXP | 22.10 | 23.88 | 8.05% |
| PulteGroup, Inc. | PHM | 11.14 | 8.04 | -27.83% |
| Steel Dynamics, Inc. | STLD | 14.67 | 13.67 | -6.31% |
| Synutra International, Inc. | SYUT | 19.76 | 10.16 | -48.58% |
| Terex Corporation | TEX | 21.76 | 18.21 | -16.31% |
| Tutor Perini Corporation * | TPC | 22.30 | 19.76 | -11.39% |
| Warner Chilcott Plc | WCRX | 23.12 | 28.42 | 22.92% |
| Wells Fargo & Company | WFC | 28.69 | 23.55 | -17.77% |
| Average Return, Mid- and Large-Cap Companies | -7.72% | |||
| WatchList Companies Three-Month Return: | -7.72% | |||
| Russell 1000 Index Three-Month Return: | -1.45% |
*flagged in August for insider trading
The 25 Least Transparent Small-Caps
| Company | Ticker | Price: May 28 | Price: August 31 | 3-month Variance % (Adjusted) |
|---|---|---|---|---|
| Air Transport Services Group Inc. | ATSG | 5.62 | 4.60 | -18.15% |
| American Dairy, Inc.* | ADY | 16.94 | 8.15 | -51.89% |
| Belo Corp.* | BLC | 7.27 | 5.23 | -28.06% |
| China Information Security Tech, Inc. | CPBY | 5.30 | 5.06 | -4.53% |
| China Security & Surveillance Tech. Inc. | CSR | 4.68 | 5.40 | 15.38% |
| Clinical Data, Inc. | CLDA | 16.47 | 14.90 | -9.53% |
| Dolan Media Company | DM | 12.30 | 9.17 | -25.45% |
| Flagstar Bancorp, Inc. | FBC | 5.08 | 2.28 | -55.12% |
| FreightCar America, Inc. | RAIL | 26.82 | 23.33 | -13.03% |
| Headwaters Incorporated | HW | 3.95 | 3.07 | -22.28% |
| Home System Group | HSYT | 4.65 | 4.00 | -13.98% |
| Huron Consulting Group | HURN | 23.42 | 18.45 | -21.22% |
| Kaiser Aluminum Corp. | KALU | 37.43 | 36.93 | -0.74% |
| KapStone Paper and Packaging Corp. | KS | 11.05 | 11.39 | 3.08% |
| Kenexa Corporation | KNXA | 14.23 | 11.11 | -21.93% |
| Navios Maritime Holdings Inc. | NM | 6.13 | 5.30 | -12.62% |
| Rudolph Technologies, Inc. | RTEC | 8.88 | 7.91 | -10.98% |
| Sequenom, Inc. | SQNM | 6.13 | 6.16 | 0.49% |
| Skilled Healthcare Group, Inc. | SKH | 8.23 | 3.36 | -59.17% |
| SkyWest, Inc. | SKYW | 14.67 | 12.74 | -12.85% |
| TeleCommunication Systems, Inc. * | TSYS | 5.01 | 3.08 | -38.52% |
| United Online, Inc. | UNTD | 6.82 | 4.93 | -26.27% |
| UTStarcom, Inc. | UTSI | 2.06 | 1.89 | -8.25% |
| Wonder Auto Technology, Inc. | WATG | 8.31 | 7.70 | -7.34% |
| Yongye International, Inc. | YONG | 7.49 | 7.80 | 4.14% |
| Average Return: Small-Cap Companies | -17.55% | |||
| WatchList Companies Three-Month Return: | -17.55% | |||
| Russell 2000 Index Three-Month Return: | -5.99% |
*flagged in August for insider trading
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Top Losing Stocks