The Week's Biggest Stock Laggards

For investors focused on lucky numbers, it may be notable that the Dow Jones Industrial Average (INDEX: ^DJI  ) not only topped 13,000 this week but also convincingly held above it. Of course, that's only part of the bigger story, as market indexes continued to march upward this week, building on their already-hefty gains of 2012. In particular, if you're a significant investor in bank and financial stocks, the week probably treated you well, as results from the Federal Reserve's banking stress tests sent financial stocks soaring.

By the time the dust had settled on Friday, the Dow had tacked on 2.4%, while the broader Russell 3000 climbed 2.3%. But all was not well for all industries and stocks.

The 3 Worst-Performing Sectors

Russell 3000 Sector

Weekly Price Change

Month-to-Date Price Change

Utilities (0.5%) 0.4%
Consumer Staples 1% 1.6%
Telecom 1.1% 3.1%

Source: S&P Capital IQ. Weekly price change is March 9-March 16. Monthly price change is Feb. 29-March 16.

The big drop in Clear Channel Outdoor's (NYSE: CCO  ) stock isn't necessarily bad news for investors. What it primarily reflects is that the company went through with its plans to raise a bunch of debt and pay investors a big special dividend. When a company returns cash to shareholders, it typically leads to a commensurate drop in the stock price, as the return of capital reduces the value of the company. But the story may not end there, because some Clear Channel Outdoor investors don't like the way this debt raise and dividend was carried out, and they've sued the company.

Meanwhile, Internet telephony specialist 8x8 (Nasdaq: EGHT  ) took it on the chin after an early week downgrade from an analyst at B. Riley. The stock was dropped from a buy to a neutral rating, and its target price was slashed from $5.05 to $4.76.

The 3 Worst-Performing Russell 3000 Companies

Company

Weekly Price Change

Clear Channel Outdoor (42.7%)
McEwen Mining (19.7%)
8x8 (16.1%)

Source: S&P Capital IQ. Weekly price change is March 9-March 16. Includes only companies with market caps of $250 million or more.

Also among the week's worst performers were Abraxas Petroleum (Nasdaq: AXAS  ) and Getty Realty (NYSE: GTY  ) .

Abraxas' stock got whacked after the company reported results for the final quarter of 2011. Revenue for the quarter was $16.5 million, up 19% from the prior year. However, the company's bottom line plunged into the red, finishing with a $0.06-per-share loss. On an adjusted basis, the company's loss was $0.01 per share, but that was still easily short of the $0.05 that Wall Street was looking for. The company said that the quarter's results were hurt by pipeline and gas plant capacity issues.

Getty fell victim to a similarly disappointing fourth-quarter report, but that was really only the beginning of investors' concerns. Getty Petroleum Marketing, which accounted for roughly two-thirds of Getty Realty's 2010 revenue, is bankrupt and creating major uncertainty for Getty's business. One very specific and painful impact of that uncertainty was the company's decision to put off its decision on paying a quarterly dividend.

That's it for the weekly laggards recap. Looking to turn the tides and find some strong outperformers in the year ahead? The Motley Fool has created a brand new free report titled "The Motley Fool's Top Stock for 2012." In it, my fellow Fools reveal a top pick that's poised for explosive growth ahead. Get instant access -- it's free.

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Fool contributor Matt Koppenheffer has no financial interest in any of the companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter, @KoppTheFool, or on Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.


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  • Report this Comment On March 19, 2012, at 12:06 PM, olesoc wrote:

    Oh contrare; AXAS is being whacked unfairly. Seems like market makers driving down to take advantage of 4th qrtr report and giving no respect for positive comments last conference call. 2012 and 2013 are going to be super years as Baken emphasis matures. Go AXAS

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