Markets started the week by declining on Monday, with the S&P 500 index down 2.08%, the Nasdaq off 2.27% and the Dow Jones Industrial Average 2.11% lower.
Market observers have blamed the fall on concerns about slowing global growth and the imminent threat of the Federal Reserve hiking interest rates. The day started off with President Donald Trump questioning the Fed’s likely rate increase Wednesday, which would be its fourth this year.
“It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!” he tweeted.
While volatility is producing more opportunities for investors, the year has already seen many stocks tumble far from their highs and possibly become more appealing. According to MarketWatch, more than half of S&P 500 stocks have fallen to “bear-market territory,” or a 20% decrease.
Most of the worst performers in the S&P 500 faced challenges in their businesses. The GuruFocus All-in-One Screener shows that these five S&P 500 stocks lost more than half their market value and are down the most for 2018: Coty Inc. (COTY, Financial), Mohawk Industries Inc. (MHK, Financial), General Electric Co. (GE, Financial), Newfield Exploration Co. (NFX, Financial) and Affiliated Managers Group Inc. (AMG, Financial).
Coty Inc.’s stock price dropped 60.7% year to date, making it the worst performer in the S&P 500. Coty’s shares fell 3.28% on Monday alone to $7.07 per share.
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Coty, a beauty company with $9 billion in revenue, hired a new CEO, Perre Laubies, in November to help its struggling business. The company reported a revenue decline of 9.2% in its fiscal first quarter of 2019 due to what it called “several temporary supply chain-related headlines.” The company that while it expects to correct the issues by the third fiscal quarter, it would next recover from the financial impact by the end of the fiscal year.
Three investors GuruFocus tracks started positions in Coty in the third quarter: George Soros (Trades, Portfolio), Steven Cohen (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio).
Coty Inc has a market cap of $5.31 billion with a price-sales ratio of 0.58. The trailing 12-month dividend yield of Coty is 7.07%. The forward dividend yield of Coty is 6.84%.
Mohawk Industries Inc. (MHK, Financial)
Shares of Mohawk Industries plunged 57.6% year to date. After a 1.05% slide on Monday, they closed the day at $115.75 per share.
Mohawk, a flooring company, missed its third-quarter sales estimates, with revenue up 4% year-over-year. Contributing to the weak results were price increases and higher inflation and fuel costs, along with softer demand in most of its market. In a release, the company said it expected the negative trends to continue, with lower sequential revenue for the fourth quarter.
Six investors GuruFocus tracks started positions in the company in the third quarter, with Steven Romick (Trades, Portfolio), First Pacific Advisors (Trades, Portfolio) and Joel Greenblatt (Trades, Portfolio) buying the most shares.
Mohawk Industries Inc. has a market cap of $8.59 billion with a price-earnings ratio of 9.95 and price-sales ratio of 0.88. Mohawk Industries Inc. had an annual average earnings growth of 21% over the past five years.
General Electric Co. (GE, Financial)
GE Co. lost 57.3% of its market so far in 2018. The stock gained 0.56% on Monday to $7.15 per share.
The power, health care and aviation giant reported a 4% year-over-year decline in revenues for the third quarter, with the biggest lost, at 33%, in its power segment. GE reported a loss of $2.62 per share, compared to net earnings of 15 cents in the same quarter of 2017.
In response, GE announced a number of changes to its business, including cutting its dividend to 1 cent per share from 12 cents per share. It will also reorganize its power segment by dividing it in a unified gas segment and another segment housing steam, grid solutions, nuclear and power conversion. Leading the transition will be the company’s new chairman and CEO, Lawrence Culp Jr., named on Oct. 1.
Of the investors GuruFocus tracks, only Chris Davis (Trades, Portfolio) started a position in the company in the third quarter.
General Electric Co. has a market cap of $62.19 billion with a price-sales ratio of 0.51. The trailing 12-month dividend yield of General Electric Co. stocks is 6.71%. The forward dividend yield of General Electric Co. is 0.56%.
Newfield Exploration Co. (NFX, Financial)
Newfield Exploration stock plummeted 53.4% year to date. Off 0.82% Monday, it closed at $14.58 per share.
Newfield Exploration is an oil exploration and production company focused on Oklahoma, North Dakota and Utah with developments offshore China. On Nov. 1, it announced that it would be acquired by Encana Corp. (ECA) in an all-stock transaction valued around $5.5 billion expected to close in the first quarter of 2019.
Louis Moore Bacon (Trades, Portfolio) and Steven Cohen (Trades, Portfolio) started positions in the company in the third quarter.
Newfield Exploration Co. has a market cap of $2.92 billion, with a price-earnings ratio of 5.6 and price-sales ratio of 1.18.
Affiliated Managers Group Inc. (AMG, Financial)
Shares of Affiliated Managers Group lost 52.9% year to date. They edged up 0.010% Monday to close at $95.46.
The global asset management company has roughly $830 billion in assets under management and partners with boutique investment firms. In what the company’s President and CEO Nathaniel Dalton called a “challenging environment for asset managers,” AMG managed to report positive headline results. The company posted third-quarter diluted earnings per share of $2.34, up from $2.22 in the same quarter a year earlier. Revenue also increased to $601.3 million from $585.7 million a year earlier, as net inflows reached $0.9 billion.
Three investors GuruFocus tracks bought stakes in the company in the third quarter: John Rogers (Trades, Portfolio), Mason Hawkins (Trades, Portfolio) and Steven Cohen (Trades, Portfolio).
Affiliated Managers Group Inc. has a market cap of $5.03 billion with a price-earnings ratio of 7.50 and price-sales ratio of 2.23. The trailing 12-month dividend yield of Affiliated Managers Group is 1.27%. The forward dividend yield of Affiliated Managers Group Inc 1.26%. Affiliated Managers Group had annual average earnings growth of 13.10% over the past 10 years. GuruFocus rated Affiliated Managers Group Inc the business predictability rank of 1-star.
See more stocks that fell in 2018 using the All-in-One Screener here.
