The surface of the S&P 500 makes markets look calm. But look down just one layer, and you’ll see some serious pain. Is more pain to come?
X
Nine stocks trading on the S&P 1500 index — including industrial play Proto Labs (PRLB) and consumer discretionary stocks Bed Bath & Beyond (BBBY) and GameStop (GME) — have crashed more than 70% from their 52-week highs, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
This means these stocks — which occupy the popular S&P 500, S&P SmallCap 600 or S&P Midcap 400 indexes — are erasing massive amounts of wealth.
And these stocks in major trouble highlight the massive gulf between the market’s winners and losers.
Small-cap growth stocks, which were responsible for big gains last year, are now squarely in a correction. They’re down more than 10% from their highs, as measured by the SPDR S&P 600 Small Cap Growth ETF (SLYG). The big-cap-dominated SPDR S&P 500 ETF Trust (SPY), on the other hand, is holding up slightly better: down 4.6%.
“Equity markets have soared higher in 2021, based on an exceptionally strong economic rebound; however, according to a composite of our equity valuations, we think the market is 5% overvalued,” said Morningstar’s chief U.S. strategist, Dave Sekera.
Losers Are Sticking Out In The S&P 500
If you’re sitting on stocks that are down 70% or more from their highs, you’re definitely an outlier, in a bad way. More than 200 of the stocks in the S&P 1500 are in an opposite position — at or within 5% of a high.
In fact, over the last week of December and first week of January the number of S&P 500 stocks gaining outnumbered the number falling by the strongest amount since Oct. 8, 2020, says Bespoke Investment Group. “Most sectors’ current readings are through the roof and higher than most or any period observed in the past year,” Bespoke said.
So if you’re down this much, you’re feeling the other end of the market’s trend. Now nearly a third of S&P 1500 stocks are down 20% or more from their highs.
The Hardest-Hit Stocks
Scanning the hardest-hit stocks shows Proto Labs, a maker of industrial laser equipment, as the biggest loser. It’s down a bruising 82% from its 52-week high notched on Jan. 27 of last year. In just a year’s time, the stock is down nearly 73%. During that time, the S&P 500 is up more than 19%.
The company’s fundamentals are an anchor. Profit in 2021 is seen dropping more than 40%. And even this year, profit is expected to be more than 30% lower than it was in 2020.
Meme Stocks Are Hurting In A Bad Way
The so-called “meme stocks,” are suffering too. Former highflier GameStop has seen shares plunge more than 77% from their high on Jan. 28, 2021. Amazingly, though, the stock is still up more than 180% in the past 12 months. That gain, though, is vanishing fast.
Bed Bath & Beyond, another meme play, is now down by more than 73% from its 52-week high on Jan. 27. That cut in the company’s market value, though, is starting to hit bone. The stock is down roughly 40% in 12 months.
The meme implosion has even touched the S&P 500. While not a single S&P 500 stock is down 70% from its high, ViacomCBS (VIAC) is close. It’s down nearly 67% from its meme-induced high set on March 15, 2021.
It’s unclear if these big losers portend more trouble for the S&P 500. But it’s clear now that the market has plenty of pain under the surface.
Hardest-Hit Stocks
S&P 1500 stocks down 70% or more from their 52-week highs
| Company | Ticker | Index | Date of 52-week high | % change from 52-week high | Sector |
|---|---|---|---|---|---|
| Proto Labs | (PRLB) | S&P 600 | 1/27/2021 | -81.9% | Industrials |
| Tabula Rasa HealthCare | (TRHC) | S&P 600 | 1/27/2021 | -78.8 | Health Care |
| GameStop | (GME) | S&P 400 | 1/28/2021 | -77.3 | Consumer Discretionary |
| Spectrum Pharmaceuticals | (SPPI) | S&P 600 | 6/14/2021 | -76.7 | Health Care |
| SelectQuote | (SLQT) | S&P 600 | 4/13/2021 | -75.2 | Financials |
| Tactile Systems Technology | (TCMD) | S&P 600 | 2/10/2021 | -74.3 | Health Care |
| eHealth | (EHTH) | S&P 600 | 1/27/2021 | -74.2 | Financials |
| Bed Bath & Beyond | (BBBY) | S&P 600 | 1/27/2021 | -73.2 | Consumer Discretionary |
| Pennant Group | (PNTG) | S&P 600 | 1/25/2021 | -72.8 | Health Care |
Source: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
YOU MAY ALSO LIKE:
Bank Of America Names Top 11 Stock Picks For 2022
MarketSmith: Research, Charts, Data And Coaching All In One Place
12 Stocks Turned $10,000 Into $413,597 In 12 Months
Check Out IBD’s New IBD Live Panel Discussion
