It’s safe to say more than a few companies have taken it on the chin with recent volatility in the markets. At the same time some have fallen much further than others. Now the question is why? While there are plenty of reasons and arguments why certain names have dropped heavily, overall it looks like investors are running into stocks with strong fundamentals, which should allow stronger companies to better withstand economic uncertainty.
We ran a screen for company’s that had dramatically underperformed the S&P 500 in the last month and weak profitability (ROE TTM<3%). From this narrowed pool of names we screened for companies that also had poor top line performance (1-year fiscal revenue growth<3%).
The list is ranked from worst to least worst by 1-month performance:
1. Dendreon Corp (DNDN)
Sector | Healthcare |
Industry | Biotechnology |
Market Cap | $1795 million |
Beta | 4.04 |
Analyst Sentiment | 11/20-List Hold/Neutral (Neutral) |
The company develops and sells cancer treatment options for patients. The company’s 1 month return is -69.08%. DNDN’s 1-year fiscal revenue growth rate is -9.01%. The company’s return on equity is -76.28%. The short interest for the company is 11% as of 8/15/2011.
2. MGIC Investment Corporation (MTG)
Sector | Financial Services |
Industry | Insurance - Property and Casualty |
Market Cap | $382 million |
Beta | 3.11 |
Analyst Sentiment | 5/7-List Buy/Outperform (Bullish) |
The company provides private mortgage insurance to the mortgage industry in the US. The company’s 1 month return is -57.59%. MTG’s 1-year fiscal revenue growth rate is -11%. The company’s return on equity is -24.31%. The short interest for the company is 11% as of 8/15/2011.
3. CoreLogic, Inc. (CLGX)
Sector | Industrials |
Industry | Business Services |
Market Cap | $841 million |
Beta | 0.8 |
Analyst Sentiment | 5/6-List Hold/Neutral (Neutral) |
The company sells property, financial, consumer information, and more to a variety of different industries in the US. The company’s 1 month return is -50.28%. CLGX’s 1-year fiscal revenue growth rate is -4.55%. The company’s return on equity is -4.48%. The short interest for the company is 4.10% as of 8/15/2011.
4. Patriot Coal Corporation (PCX)
Sector | Basic Materials |
Industry | Coal |
Market Cap | $1122 million |
Beta | 3.27 |
Analyst Sentiment | 7/15-List Hold/Neutral (Neutral) |
The company produces and sells thermal coal primarily to electricity generators in the US. The company’s 1 month return is -50.22%. PCX’s 1-year fiscal revenue growth rate is -0.5%. The company’s return on equity is -7.43%. The short interest for the company is 12% as of 8/15/2011.
5. USG Corp (USG)
Sector | Basic Materials |
Industry | Building Materials |
Market Cap | $757 million |
Beta | 2.9 |
Analyst Sentiment | 12/14-List Hold/Neutral (Neutral) |
The company manufactures and sells building materials worldwide. The company’s 1 month return is -48.46%. USG’s 1-year fiscal revenue growth rate is -9.15%. The company’s return on equity is -62.51%. The short interest for the company is 22% as of 8/15/2011.
6. Flagstar Bancorp, Inc. (FBC)
Sector | Financial Services |
Industry | Savings and Cooperative Banks |
Market Cap | $341 million |
Beta | 2.01 |
Analyst Sentiment | 4/4-List Hold/Neutral (Neutral) |
The company operates Flagstar Bank. The company’s 1 month return is -47%. FBC’s company’s 1-year fiscal revenue growth rate is -14.36%. The company’s return on equity is -28.54%. The short interest for the company is 11% as of 8/15/2011.
7. Monster Worldwide, Inc. (MWW)
Sector | Industrials |
Industry | Staffing and Outsourcing Services |
Market Cap | $939 million |
Beta | 2.21 |
Analyst Sentiment | 10/16-List Buy/Outperform (Bullish) |
The company offers online employment solutions in North America, Europe, and Asia. The company’s 1 month return is -45.58%. MWW’s 1-year fiscal revenue growth rate is 0.99%. The company’s return on equity is 0.52%. The short interest for the company is 14% as of 8/15/2011.
8. Mueller Water Products, Inc. (MWA)
Sector | Industrials |
Industry | Diversified Industrials |
Market Cap | $317 million |
Beta | 2.62 |
Analyst Sentiment | 7/9-List Hold/Neutral (Neutral) |
The company manufactures and sells a range of water flow control, infrastructure, and piping component system products. The company’s 1 month return is -42.53%. MWA’s 1-year fiscal revenue growth rate is -6.33%. The company’s return on equity is -8.81%. The short interest for the company is 7.10% as of 8/15/2011.
9. Pilgrims Pride Corp. (PPC)
Sector | Consumer Defensive |
Industry | Farm Products |
Market Cap | $635 million |
Beta | 3.07 |
Analyst Sentiment | 3/6-List Hold/Neutral (Neutral) |
The company produces and sells fresh and frozen chicken products in the United States. The company’s 1 month return is -42.19%. PPC’s 1-year fiscal revenue growth rate is -2.33%. The company’s return on equity is -16.55%. The short interest for the company is 11% as of 8/15/2011.
10. Digital River, Inc. (DRIV)
Sector | Technology |
Industry | Software - Application |
Market Cap | $745 million |
Beta | 1.52 |
Analyst Sentiment | 10/15-List Hold/Neutral (Neutral) |
Digital River, Inc., together with its subsidiaries, provides outsourced e-commerce solutions worldwide. The company’s 1 month return is -41.95%. DRIV’s 1-year fiscal revenue growth rate is -10.04%. The company’s return on equity is 2.67%. The short interest for the company is 11% as of 8/15/2011.
We hope this list helps investors as they do their own due diligence on companies on companies that have dramatically underperformed the S&P 500 recently.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
