As the quarter draws to a close, I thought it'd be useful to look at the worst performing stocks YTD from the Russell 1000. It's been a rocky ride in the stock markets, so I thought several of these names might have been unfairly oversold and might present value for an investor who can look past the poor short term performance.
|Ticker||Short Name||QTD return (in %)||EV/ TTM EBIT||Op ROIC (in %)||Price:D-1||P/E|
|CEDC||CENTRAL EURO DIS||-51.35||25.78||3.30||11.22||38.41|
|AMLN||AMYLIN PHARM INC||-26.92||N/A||-14.99||10.54||N/A|
|GDOT||GREEN DOT CORP-A||-25.91||32.13||54.51||42.32||44.82|
|WMS||WMS INDS INC||-21.95||15.48||21.42||36.15||19.06|
|HCBK||HUDSON CITY BNCP||-21.62||N/A||2.52||9.87||9.06|
|DAL||DELTA AIR LI||-20.87||8.37||14.07||9.80||5.81|
|GHL||GREENHILL & CO||-19.08||N/A||17.71||65.91||58.73|
|NLC||NALCO HLDG CO||-16.01||12.29||15.48||26.99||15.82|
|BBY||BEST BUY CO INC||-14.56||5.70||25.84||29.22||8.45|
All data from Bloomberg.
Phew, that's certainly an ugly list. In just one quarter, the average stock on this list is down over 21%! However, I think the list presents a variety of really interesting options.
Guess? (GES), Urban Outfitter (URBN), RadioShack (RSH), Best Buy (BBY), and Target (TGT) all trade at cheap to reasonable valuations despite strong returns and capital and the retail sector being in the cross hairs of private equity. In the case of Best Buy and RadioShack, there's even been talk of the two merging with each other.
Southern Copper seems interesting, simply because it's exposed to rising commodities prices, earns great returns on capital, has a high dividend yield, and trades at a discount to its peers.
Finally, given the ongoing consolidation in tech land, investors may want to check out AOL. The company has struggled since being spun off, but they still have several valuable brands. Analysts are starting to turn more positive on the name, and the company is very cheap relative to its peers. Speaking of tech, Cisco shares have been destroyed over the past 6-9 months. However, the company still enjoys a great brand, and they've been starting to attract a lot of attention from value investors given their cheap valuation, fortress balance sheet, and strong returns on capital.
Some of the names on this list definitely have a lot of risks associated with them. However, all of them have very negative sentiment associated with them, and that can be a great opportunity for value investors.
Disclosure: I am long RSH.