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I discussed Goldman Sachs' best performing buys from the September quarter in a previous article. It is also interesting to have a look at some of its winning sells from the September quarter. These stocks have underperformed S&P 500 by at least 800 bps since the end of that month.

Stock

Symbol

Shares Held - 06/30/2011

Shares Held - 09/30/2011

Change in shares

% Change in Price since Sept. 30

Pepsico Inc.

PEP

22129957

16881815

-5248142

5.46%

Southwestern Energy co.

SWN

9251806

1164042

-8087764

-6.09%

Newfield Exploration Co.

NFX

6114154

1231174

-4882980

-1.69%

Accenture Plc

ACN

6416390

3206974

-3209416

3.58%

Johnson & Johnson

JNJ

11377408

8817087

-2560321

1.72%

Lorillard Inc.

LO

4275402

2998319

-1277083

0.23%

Hasbro Inc.

HAS

4032531

772832

-3259699

-0.50%

Source: 13F filing

I believe Pepsico and Southwestern Energy can see further downside from the current levels.

Pepsi's slowing growth and market shares losses against its key rival Coca Cola (KO) makes it a risky stock. There are some expectations that company may announce some cost-cutting and restructuring measures early this year, and hence the stock might be show some strength in 2012. However, I don't see any likelihood of the stock outperforming. Given the kind of uncertain environment we are in, announcements have little impact unless accompanied by actual execution. When Coca-Cola faced similar problems in the past, it took it around 5 years of disciplined focus on brand building, innovation, bottler re-investment to improve trends. Clearly, it is not going to be an easy ride for Pepsi either.

Southwestern Energy Company engages in the exploration, development and production of natural gas and crude oil in the Unites States. It operates through two segments, Exploration and Production services and Midstream services.

I am bearish on Southwestern due to turmoil in natural gas prices in the U.S. Natural Gas spot market pricing is near its lowest level in the last eight months. Further, SWN is fully levered towards natural gas production and this steep fall in natural gas price is expected to affect its earnings potential in 2012. SWN's 88% of production is from its Fayetteville operations which is relatively uneconomical to its Marcellus play.

Going forward, in 2012 there is not much visibility on new ventures for SWN. Its exploratory results for Louisiana Brown Dense play, New Brunswick Canada Basin and one undisclosed oil play are not expected in the near term. Due to downbeat look in natural and gas industry for the medium term, I believe that the current trading multiple is on the higher side and the stock may see a decline from current levels.

One stock in the above list which I would recommend going long on after recent underperformance is Accenture. Accenture is gaining market share in the IT industry due to its strong domain expertise, industry-leading technical and consulting capabilities, and strong onsite presence. Clients continue to focus on vendor consolidation and are building strategic vendor relationships with IT services firms that have a wide breadth of offerings. ACN with its presence across industry verticals and service lines is well placed to increase its share especially in the key accounts. Going forward three specific technologies: mobility, cloud and analytics are likely to cause a good upside in the business. Each of these technologies has potential to become billion dollar businesses and Accenture is well positioned to capitalize on these trends as the largest agnostic technology solutions provider in the world.

Source: Goldman's Top Underperforming Sells: 2 Potential Shorts, 1 To Buy