The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, Abbott Laboratories and AbbVie, La Monica does not own positions in any individual stocks.
It’s trick or treat time … Wall Street style!
I usually use Halloween as an excuse to take a look at the year’s best and worst stocks. I already wrote about Keurig Green Mountain (GMCR) on Thursday. It’s a treat if you have it in your portfolio.
But Halloween is about being scared out of your wits. So it’s much more fitting to look at the worst stocks, the ones with terrifying year-to-date charts.
Unsurprisingly, several of this year’s biggest losers are oil drillers.
Each stock has fallen at least 30% … which makes them among the 10 worst performers in the S&P 500 this year.
But there are some more well-known brand-name stocks that should have you screaming as if you were Jamie Lee Curtis fleeing Michael Myers. Here are five.
1. Ding-dong! If you see a trick-or-treater dressed like an Avon Lady, slam the door. Heck, that’s what most people are doing.
Avon (AVP) is the worst stock in the S&P 500 this year, down more than 40%. The cosmetics company reported its latest results Thursday and they were grim. Sales fell 8%, missing forecasts.
2. Papa’s got a brand new bag … and it ain’t from Coach. Coach (COH) is struggling to turn itself around. The handbag maker said earlier this week that sales fell 10% in the third quarter.
Consumers may still be hellbent for leather … but they’re buying it elsewhere. Competition from Michael Kors (KORS) and Kate Spade (KATE) has been brutal. Their stocks have taken a tumble this year too, but Coach has been hit the hardest.
3. The misfit toy stock. Sorry to any fans of Scandinavian group Aqua, but we’re not living in a Barbie world anymore.
Mattel (MAT) shares have plunged this year along with Barbie sales. But it’s not as if parents have stopped buying toys for their kids. Shares of Hasbro (HAS) are near an all-time high. Simply put, Hasbro has cooler toys that boys and girls want: NERF, My Little Pony, Star Wars and Transformers.
And it’s going to get worse for Mattel (and better for Hasbro) soon. Mattel, currently the rights owner for toys tied to Disney’s (DIS) Princess line of characters, is losing that deal to Hasbro in 2016 … and that includes Elsa and Anna from “Frozen.” Investors that haven’t already done so may want to let Mattel go.
4. Rotten produce. Eating organic food is good for you. Investing in the company that made it popular for the masses? Not so much. Whole Foods (WFM) is a classic victim of its own success.
Whole Foods has acknowledged that it has to worry more about other retailers selling kale and quinoa for lower prices.
5. Put down the corporate credit card, Jeff! Amazon (AMZN) is a company that could be doing better. But CEO Jeff Bezos has chosen to sacrifice current profits in order to build for the future.
It’s a strategy that has worked in the past. But investors are nervous that Bezos may be losing his Midas touch. The Fire Phone has been a failure. And losses are mounting as the company invests heavily in its cloud business.
Add in the fact that Amazon issued a less-than-stellar sales outlook for the fourth quarter and it’s no wonder that the stock is one of the worst performers in CNNMoney’s Tech 30 index this year.
Now it’s worth noting that this year’s tricks could be next year’s treats. Edwards Lifesciences (EW), Intuitive Surgical (ISRG) and CenturyLink (CTL) have all bounced back sharply this year after a lousy 2013. But you have to do your homework.
Diamond Offshore was a loser last year. And last year’s biggest S&P 500 laggard, Newmont Mining (NEM) is down again in 2014. Some dogs remain pooches.
Reader Comment of the Week! The Federal Reserve finally ended its quantitative easing program this week.
I tweeted about how well stocks have done since the bond purchases started. I’m glad that somebody caught my reference to a 1980s public service announcement.
So if QE is the egg, then are rate hikes the chicken? Because the egg came first, right? Or is it the other way around? Oh no.
Anyway, happy Halloween. Happy end of October. Here’s hoping next month is less stormy for stocks. We don’t want any cold November rain. Yup. I’m going there. Enjoy the next nine minutes of cheesy power ballad rock at its finest.