This article highlights the 20 worst performing stocks in the S&P 500 for Q3 2019. Note that the list includes one day in Q4 2019 since I ran the screen one day late. The list includes several stocks from the oil & gas sector, retail sector as well as some previously high-flying tech stocks including Netflix, Inc. (NFLX) and Align Technology, Inc. (ALGN). Stocks from sectors that typically carry higher interest rates or are perceived to be safe havens are absent from the list including utilities, REITs, and consumer staples. These stocks are typically interest rate sensitive so as rates declined investors may have moved into these stocks. Note that even though some stocks such as Netflix and Ulta Beauty Inc (ULTA) had a relatively poor quarter, they are still up year-to-date.
Drilling and exploration stocks are being affected by a reduction in rig count and lower oil prices. The rig count is reportedly the lowest since April 2017. It is no surprise the several retail stocks are on the list. Companies such as L Brands, Inc. (LB), Macy’s, Inc. (M), Under Armour, Inc. (UAA), and Ulta Beauty are being impacted by the so-called retail apocalypse and intense competition from e-commerce. It is likely that traditional bricks-and-mortar retailers that do not successfully transition to an omnichannel model will continue to suffer. Netflix has been a top performing stock for years, but competition is increasing in streaming television with new entrants with deep pockets such as Disney (DIS), AT&T Inc (T), CBS Corporation (CBS), and Comcast Corporation (CMSCA). Similarly, Align Technology is facing new entrants in its market space with companies such as SmileDirectClub Inc (SDC) entering the space.
I hope that this short highlight article is informative and provides readers some insight into broader market trends and changes for the recently completed quarter.
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