7 of the Worst Stocks in Gurus' Portfolios

Investors are buying and holding these stocks with negative returns

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Feb 13, 2017
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While gurus hold positions in these companies, the stock price and returns continue to fall. These are the worst-performing stocks over the last six months with a long-term presence in more than four gurus’ portfolio.

EXCO Resources Inc. (XCO, Financial) has a negative performance of -50.6% over the last six months. Despite this, four mutual funds are still holding the stock with a total weight of 15.98% on their portfolios.

The company has a market cap of $182.8 million and is now trading with a price-sales (P/S) ratio of 0.80. The current price of 65 cents is 66.49% below its 52-week high and 27.45% above its 52-week low. Over the last 10 years, it has returned a loss of 96%.

Over the last five years, EXCO Resources has reported a decrease of 11.60% for revenue and 34.80% for free cash flow. EBITDA and earnings per share (EPS) did not face any change.

Current returns are negative. The return on assets (ROA) of -28.78% is ranked higher than 94% of its competitors. The return on capital (ROC) is -41.94%, underperforming 62% of other companies in the Global Oil and Gas Exploration and Production industry.

During the first quarter of the year,Ă‚ Howard Marks (Trades, Portfolio) reduced his stake by 18.30%.

Avid Technology Inc. (AVID, Financial) has a negative performance of -34.5% over the last six months. Regardless this, four mutual funds are holding the company with a total weight of 180.55% on their portfolios.

The company has a market cap of $229.53 million and is now trading with a price-earnings (P/E) ratio of 5.77 and a P/S ratio of 0.44. The current price of $5.65 is 42.23% below its 52-week high and 41.60% above its 52-week low. Over the last 10 years, it has decreased 82%. According to the DCF calculator, the company is undervalued with a margin of safety of 42%.

Over the last five years, Avid Technology has reported a 8.4% decline in revenue while EBITDA, free cash flow and EPS did not face any change.

Current returns are positive. The ROA of 14.19% is ranked higher than 88% of competitors and the ROC of 151.69% outperforms 81% of other companies in the Global Electronic Gaming and Multimedia industry.

During the last quarter of the year, Barrow, Hanley, Mewhinney & Strauss reduced its holding by 0.28%.

Rent-A-Center Inc. (RCII, Financial) has a negative performance of -30.8% over the last six months. Despite this, four mutual funds are still holding the company with a total weight of 0.76% on their portfolios.

The company has a market cap of $457.09 million and is now trading with forward P/E ratio of 7.16 and a price-book (P/B) ratio of 0.92. The current price of $8.6 is 47.46% below its 52-week high and 10.82% above its 52-week low. Over the last 10 years, it returned a loss of 72%.

Over the last five years, Rent-A-Center has reported revenue growth of 8.40% while EBITDA, free cash flow and EPS did not face any change.

Current returns are negative. The ROE of -129.07% is ranked lower than 98% of competitors and the ROA of -42.21% underperforms 97% of other companies in the Global Rental & Leasing Services industry.

During the third quarter of 2016,Ă‚ Paul Tudor Jones (Trades, Portfolio), Private Capital (Trades, Portfolio), Jim Simons (Trades, Portfolio), Charles Brandes (Trades, Portfolio) and Richard Pzena (Trades, Portfolio) increased their positions while Hotchkis & Wiley, Chuck Royce (Trades, Portfolio) and Jeremy Grantham (Trades, Portfolio) reduced their holdings.

Global Eagle Entertainment Inc. (ENT, Financial) has a negative performance of -30.6% over the last six months. Regardless, four mutual funds are still holding the company with a total weight of 2.24% on their portfolios.

The company has a market cap of $499.92 million and is now trading with a P/B ratio of 1.29 and a P/S ratio of 0.97. The current price of $5.86 is 47.06% below its 52-week high and 3.72% above its 52-week low. Over the last 10 years, it has declined 38%.

Current returns are negative. The ROE of -7.40% is ranked lower than 78% of competitors and the ROA of -3.53% underperforms 75% of other companies in the Global Media - Diversified industry.

During the third quarter, Columbia Wanger (Trades, Portfolio), Simons and Jones reduced their positions while Leon Cooperman (Trades, Portfolio) initiated a new position in the company.

American Public Education Inc. (APEI, Financial) has a negative performance of -16.5% over the last six months. Despite this, four mutual funds are still holding the company with a total weight of 1.66% on their portfolios.

The company has a market cap of $387.11 million and is now trading with a P/E ratio of 14.40 and a forward P/E ratio of 16.45. The current price of $24.05 is 21.86% below its 52-week high and 74.28% above its 52-week low. Over the last 10 years, it returned a loss of 33%. According to the DCF calculator, the stock is overpriced by 25%.

Over the last five years, American Public Education has reported revenue growth of 12.60%, 5.40% free cash flow growth, 7% EBITDA growth and 3.20% EPS growth.

Current returns are positive. The ROE of 10.96% is ranked higher than 64% of competitors and the ROA of 8.68% outperforms 76% of other companies in the Global Education and Training Services industry.

During the last quarter of the year, Barrow, Hanley, Mewhinney & Strauss reduced its holding by 0.28%.

Eclipse Resources Corp. (ECR, Financial) has a negative performance of -21.9% over the last six months. Regardless, four mutual funds are still holding the company with a total weight of 0.16% on their portfolios.

The company has a market cap of $677.54 million and is now trading with a P/B ratio of 1.09 and a P/S ratio of 2.75. The current price of $2.6 is 41.18% below its 52-week high and 300% above its 52-week low. Over the last 10 years, it has declined 90%.

Current returns are negative. The ROE of -127.10% is ranked lower than 88% of competitors and the ROA of -69.54% underperforms 84% of other companies in the Global Oil and Gas Exploration and Production industry.

During the third quarter of 2016, Andreas Halvorsen (Trades, Portfolio), Cooperman and Jones reduced their holings while Simons increased his position. Louis Moore Bacon (Trades, Portfolio), Eric Mindich (Trades, Portfolio) and Caxton Associates (Trades, Portfolio) closed their stakes in the company.

Insys Therapeutics Inc. (INSY, Financial) has a negative performance of -50.4% over the last six months. Despite this, four mutual funds are still holding the company with a total weight of 0.09% on their portfolios.

The company has a market cap of $689.71 million and is now trading with a P/E ratio of 31.01 and a forward P/E ratio of 42.02. The current price of $9.61 is 54.71% below its 52-week high and 10.46% above its 52-week low. Over the last 10 years, it returned a loss of 72%. According to the DCF calculator, the stock is overpriced by 187%.

Current returns are positive. The ROE of 9.46% is ranked higher than 85% of competitors and the ROA of 7.13% outperforms 88% of other companies in the Global Biotechnology industry.

During the third quarter of 2016, Joel Greenblatt (Trades, Portfolio) reduced his holding while Simons added to his holding. Jones and Lee Ainslie (Trades, Portfolio) established new positions in the company.

Disclosure: I do not own any shares of any stocks mentioned in this article.

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