The New York Times (NYSE:NYT) was one of 11 worst stock performers, the "dogs of Wall Street", that Ben Steverman picked out in BusinessWeek yesterday, basing his criteria on the stocks' steady decline over the past three years.
Looking at the list of stocks, a few themes emerge. Nearly all these stocks are in very competitive industries. The competition is so fierce that any mistake—a flawed product, a failed acquisition, or a botched sales strategy—can involve a tough recovery.
Steverman honed in on some companies that may suffer from being among the smaller players in a tough competitive field:
Sprint Nextel (NYSE:S) is the third-largest mobile-phone company in the U.S., and it's losing customers to larger rivals. Lexmark International (NYSE:LXK), the printer maker, and the Cooper Cos. (NYSE:COO), contact lens specialists, are also dealing with large, aggressive competitors.
Avis Budget Group (NASDAQ:CAR), he noted, had little leverage over the car firms that supply its vehicles, while others - Brunswick (NYSE:BC) with its boats and other recreational equipment and The New York Times - were just victims of changing tastes and fashions.
For high-tech firms, Steverman noted, introducing new, innovative products was the essential name of the game. And the following were failing on this score:
[printing product developer] Lexmark (LXK), medical-device maker Boston Scientific (NYSE:BSX); telecommunications equipment companies Alcatel-Lucent (ALU) and Nortel Networks (NT); Thomson (NYSE:TMS), a provider of digital media technology; and Avid Technology (NASDAQ:AVID), which makes video software and other multimedia tools.
Almost all the stocks on his list were trying hard, through investments in new lines, hiring new CEOs, and cutting costs, but at the end of the day:
...the chance remains that most of these stocks will remain in the dog pound for years to come.