The 24/7 Wall St. Fifty Least Trustworthy Companies in America, A Look Back

July 13, 2010 by Douglas A. McIntyre

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