{"id":60701,"date":"2014-09-22T05:05:07","date_gmt":"2014-09-22T09:05:07","guid":{"rendered":"http:\/\/countingpips.com\/?p=60701"},"modified":"2014-09-22T07:29:32","modified_gmt":"2014-09-22T11:29:32","slug":"red-alert-on-these-stocks-as-top-executives-quit","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/09\/red-alert-on-these-stocks-as-top-executives-quit\/","title":{"rendered":"Red Alert on These Stocks as Top Executives Quit"},"content":{"rendered":"
September 22, 2014<\/div>
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By WallStreetDaily.com<\/span><\/a> \"CEO<\/p>\n

By Robert Williams<\/a>, Founder<\/em><\/p>\n

Larry Ellison is officially out as CEO of Oracle <\/b>(ORCL<\/a>).<\/p>\n

Ellison is the last of the original Silicon Valley pirates to be supplanted as CEO.<\/p>\n

(The other pirates include Bill Gates, Steve Jobs, Bill Hewlett, and David Packard.)<\/p>\n

Mark Hurd, 57, and Safra Catz, 52, two of Ellison\u2019s trusted confidants, will take over as Co-CEOs.<\/p>

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For investors, Ellison\u2019s departure is a warning signal\u2026 that is, to run for your life.<\/p>\n

In fact, if you own any Oracle stock, I recommend dumping every share at the Opening Bell.<\/p>\n

Here\u2019s why\u2026<\/p>\n

When Executives Leave\u2026 You Should, Too<\/h2>\n

Back on May 7, I wrote a column detailing the short position that famed investor, David Einhorn<\/a>, had just put on shares of athenahealth, Inc<\/b>. (ATHN<\/a>).<\/p>\n

Einhorn asserted that the stock could lose 80% of its value in the coming months on the merits of a soon-to-burst technology bubble.<\/p>\n

Although it hasn\u2019t happened, athenahealth has dramatically underperformed the S&P 500 over the last three months.<\/p>\n

At the time, I agreed with Einhorn to exit the stock\u2026 but not because of a technology bubble.<\/p>\n

You see, athenahealth\u2019s CFO, Tim Adams, had just resigned.<\/p>\n

As history shows, an outgoing CEO or CFO is reason alone to dump shares\u2026 that is, over a short-term investment horizon. It creates too much uncertainty \u2013 and uncertainty is a dirty word on the trading floor.<\/p>\n

So in the spirit of avoiding uncertainty \u2013 along with exiting all positions in Oracle\u2019s stock \u2013 I recommend shunning the following companies, as well\u2026<\/p>\n

Clorox<\/b> (CLX<\/a>)<\/b><\/p>\n

Last Thursday, Clorox announced that Don Knauss will step down as CEO. A former Marine, Knauss became one of a rare few to defeat fiery activist investor, Carl Icahn, when Icahn made a hostile takeover bid in 2011. But has Knauss lost his mojo? He\u2019s coming off a year where he oversaw a wafer-thin 0.6% rise in Clorox sales and a 3% drop in the firm\u2019s share price. With rampant competition from generic brands, Clorox is spending more on marketing \u2013 but still struggling to gain traction.<\/p>\n

RadioShack Corp.<\/b> (RSH<\/a>)<\/p>\n

On September 12, RadioShack CFO John Feray jumped ship after just eight months on the job. When asked about his resignation, Feray cited personal reasons\u2026 but that\u2019s hard to believe considering the company warned of imminent bankruptcy just days before Feray\u2019s departure. RadioShack\u2019s plan to turn its struggling business around has largely failed, so expect the worst from RadioShack shares.<\/p>\n

Bankrate, Inc.<\/b> (RATE<\/a>)<\/p>\n

Bankrate runs websites that compare personal finance packages, but, as it turns out, the firm needs some accounting guidance of its own. On September 15, Bankrate shares fell 13% on news that not only was Bankrate CFO Edward DiMaria resigning, but also that the SEC was set to investigate the \u201cimproper accounting of more than $1.5 million of accruals and expenses.\u201d SunTrust analyst Andrew Jeffrey said he\u2019d be surprised if the investigation revealed any malfeasance, but with DiMaria running for the hills, something stinks around Bankrate headquarters.<\/p>\n

Avon Products, Inc.<\/b> (AVP<\/a>)<\/p>\n

On September 8, Kimberly Ross, CFO of the makeup and consumer products company, quit her position. Both Avon and Ross\u2019 new employer, Baker Hughes, gave her a glowing review\u2026 but AVP\u2019s numbers tell a different story. In fact, Citigroup has downgraded the stock in light of Ross\u2019 departure, citing the company\u2019s weak internal controls, depressed cash flow, and high overhead costs. Citigroup analyst Wendy Nicholson also said that \u201cthe symbolic importance of Ross abandoning ship at this stage is hard to overstate\u201d and that she was \u201cthrowing in the towel.\u201d If that doesn\u2019t send a clear message about Avon\u2019s prospects, I\u2019m not sure what would.<\/p>\n

Panera Bread<\/b> (PNRA<\/a>)<\/p>\n

Having only been on the job for 18 months, Roger Matthews resigned as CFO of Panera Bread last month. While the company trotted out the usual line that Matthews is \u201cpursuing other opportunities,\u201d we think otherwise. Amid restructuring, Deutsche Bank says Panera\u2019s fundamentals \u201chave been on the decline and difficult to forecast.\u201d So it\u2019s perhaps no coincidence that following an interview with Matthews, Wunderlich Securities put his decision down to \u201ccorporate stress.\u201d Shares are certainly stressed, too. Since hitting a 52-week high of $193.18 in March, the price has sunk by 17%. Panera may make delicious sandwiches\u2026 but its stock has E. coli. Avoid it!<\/p>\n

Other companies to have seen their CFOs resign recently include Tata Communications<\/b> (TATACOMM<\/a>) and technology firm, Intevac<\/b> (IVAC<\/a>). While both are putting a positive spin on the departures, the truth behind the scenes may be very different. Either way, don\u2019t take the risk with these stocks.<\/p>\n

Onward and Upward,<\/p>\n

Robert Williams<\/p>\n

The post Red Alert on These Stocks as Top Executives Quit<\/a> appeared first on Wall Street Daily<\/a>.<\/p>\n

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By WallStreetDaily.com By Robert Williams, Founder Larry Ellison is officially out as CEO of Oracle (ORCL). Ellison is the last of the original Silicon Valley pirates to be supplanted as CEO. (The other pirates include Bill Gates, Steve Jobs, Bill Hewlett, and David Packard.) Mark Hurd, 57, and Safra Catz, 52, two of Ellison\u2019s trusted […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-60701","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/60701","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=60701"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/60701\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=60701"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=60701"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=60701"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}