Yesterday we looked at the five S&P 500 stocks that turned in the index's best performances in 2017, the stocks every investor wishes he or she had bought before the year began. Today, our focus is shifting from the nice to the naughty.
Below are a variety of stocks that sorely disappointed investors. While US stock indices such as the S&P, Dow and NASDAQ returned 19.4%, 25.08% and 28.24% respectively in 2017, our hall of shame equities lost 44.9% of their value at the very least, with some sinking by more than 50% on the year—and that during a period when markets in general rose to record highs.
We've listed the underperformers in reverse order and noted the prices at which they started 2017, as well as where they finished the year. If you held any of these shares during 2017, well, we're awfully sorry. Here's hoping for better returns in the coming year.
Tomorrow we'll complete this series with the 5 stocks we believe will be worth following in 2018.
5. General Electric: Opened 2017 at $31.6; closed 2017 at $17.4 -44.9%
General Electric (NYSE:GE), once an admired blue chip global industrial and technology company as well as an industry leader, had a disastrous 2017. Key executives left—some might even say fled—the company, including chairman Jeffrey Immelt, who exited unexpectedly three months prior to his planned retirement date.
Then there were the company's earnings. In Q3, GE reported $0.29 against an expected $0.49, a major miss. The dividend was cut in half, adding to the negative momentum of the stock.
Right now GE is going through a significant restructuring. New CEO John Flannery is trying to breathe some life into what has been looking like a dying, old economy dinosaur, by focusing the company's revival efforts on three divisions: aviation, power and healthcare. This likely means the end of the Transportation unit, and GE Lighting.
As a result of the attempt to slim down the company, layoffs are expected to affect thousands of employees over the coming year. For GE the road ahead is long and perilous...and it's only just begun. As such GE's efforts haven't shown nearly enough results yet to signal whether it should regain investor trust.
4. SCANA: Opened 2017 at $73.3; closed 2017 at $39.7 -45.8%
SCANA Corporation (NYSE:SCG), which generates, transmits, distributes and sells electricity in South Carolina, was doing just fine during the first half of 2017.
However, in July, the utility company announced it was abandoning a planned nuclear plant construction project, after the estimated cost of completion rose to $25.7 billion, $14.2 billion more than originally anticipated when the project was first proposed in 2008. Shares fell by 8% on the day of the announcement; to date, the partially completed reactors remain half-finished.
In September, the company received a Federal subpoena regarding documents related to the cancelled project; SCANA is currently facing a class action lawsuit stemming from the unfortunate project. An audit by the governor of South Carolina's office suggested that the utility may have known its project was failing long before the decision was made to abandon the nuclear site. The ongoing legal issues have weighed on the stock through the second half of 2017.
3. Envision Healthcare: Opened 2017 at $64.1; closed 2017 at $34.5 -46.1%
Envision Healthcare (NYSE:EVHC), a provider of physician, ambulatory and medical transportation services, dropped so low—closing at $25 on November 9—during the course of the third quarter, that even a 45% rally during the final two months of the year wasn't been enough to save it from inclusion in this year's worst performers. Envision, which operates AMR, an emergency transportation service and EmCare, facility-based emergency room physician services, came under regulator scrutiny in July when a New York Times article revealed the company had a practice of billing patients for unexpected and highly expensive emergency room services.
The article was followed by class action lawsuit, and Senator Claire McCaskill of Missouri said she would look into the matter following complaints from residents of her home state. Add disappointing results for Q3 to the legal trouble, when the company reported EPS of $0.73, 17% lower than the expected $0.88, and you get a perfect storm for losses.
2. Range Resources: Opened 2017 at $33.6; closed 2017 at $17.06 -49.23%
Range Resources (NYSE:RRC) is a natural gas and oil company. Its place toward the top of our worst stocks of the year list shouldn't surprise anyone who's been following the commodities as well as oil and gas equities during the past few years.
Range Resources shares have been losing value since 2014, when it was priced at $95 per share. Since then, it has lost 82% of its value. A combination of low oil prices, production cuts, and accumulating debt have burdened the company during the past three years.
This past year, RRC's stock was pushed lower by cheap fuel prices, disappointing quarterly results, and a production forecast for 2018 below expectations, at a time when many oil and gas companies have raised guidance in tandem with higher oil prices in the second half of 2017.
1. Under Armour: Opened 2017 at $29.3; closed 2017 at $14.4 -50.85%
Back in 2015, the future seemed bright for Under Armour (NYSE:UA). It was a fresh sports apparel name, with newly crowned NBA MVP Steph Curry as the face of the brand. In December 2015, the company had a P/E ratio of 77, which reflected Wall Street's high hopes for the company.
Unfortunately, since then things have started to unravel. Sales never took off the way investors expected. In 2017, the company finished Q1 and Q2 in the red, losing $2 and $12 million respectively. Q3 results were the most recent blow to Under Armour's 2017 misery, when the company reported its first ever drop in year-over-year sales. Nike (NYSE:NKE) and Adidas (OTC:ADDYY) managed to keep their sportswear duopoly alive in 2017, much to the chagrin of Under Armour's investors.
Dishonorable Mention: Frontier Communications (NASDAQ:FTR) and Fossil Group would have made this list (down 86.6% and 69.9%, respectively), had they not been booted off the S&P index during the course of 2017 after seeing their market caps fall below the index's minimum valuation of $6.1 billion dollars.