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Since we spend a significant amount of time providing readers with attractive investment opportunities, it is now a good time to help our readers identify large cap stocks that rank poorly according to key AFG criteria, including Economic Margin, Management Quality (MQ) and Valuation Rank. These three variables have proven through back-tests to identify stocks likely to underperform sector peers and benchmarks.

In the table below you will find 20 companies from the S&P 500 that look unattractive according to key AFG investment criteria. If you own or are considering adding one of these companies to your client portfolios, you may want to take a closer look into these companies and reconsider whether or not they are worth adding/owning.

When creating our list of unattractive stocks we looked for companies that fit the following criteria.

• Unattractive valuations

• Not improving economic profitability as well as sector/index peers

• Wealth-destroying management teams

• Poor earnings quality

• In position to underperform

Investment
Ticker Name Sector Opportunity
S&P 500 Torpedo Watch-list
(DOW) DOW CHEMICAL COMPANY Basic Material Unattractive
(WM) WASTE MANAGEMENT, INC. Capital Goods Unattractive
(FO) FORTUNE BRANDS, INC. Consumer Durable Unattractive
(GT) GOODYEAR TIRE & RUBBER COMPANY Consumer Durable Unattractive
(DF) DEAN FOODS CO. Consumer Non Durable Unattractive
(CLX) CLOROX COMPANY Consumer Non Durable Unattractive
(RRD) R.R. DONNELLEY & SONS COMPANY Consumer Services Unattractive
(JWN) NORDSTROM INC Consumer Services Unattractive
(HOT) STARWOOD HOTELS & RESORTS WORL Consumer Services Unattractive
(ANF) ABERCROMBIE & FITCH CO Consumer Services Unattractive
(COG) CABOT OIL & GAS CORPORATION Energy and Extraction Unattractive
(DVN) DEVON ENERGY CORPORATION Energy and Extraction Unattractive
(THC) TENET HEALTHCARE CORPORATION Health Unattractive
(AKAM) AKAMAI TECHNOLOGIES, INC. Miscellaneous Unattractive
(AMT) AMERICAN TOWER CORPORATION Technology Unattractive
(WIN) WINDSTREAM CORPORATION Technology Unattractive
(CTSH) COGNIZANT TECHNOLOGY SOLUTIONS Technology Unattractive
(NOVL) NOVELL INC Technology Unattractive
(T) AT&T INC. Technology Unattractive
(NU) NORTHEAST UTILITIES INCORPORAT Utilities Unattractive
Source: 20 Companies to Avoid