Let Me Introduce You to 2012's Biggest Losers

Between Jan. 1 and the open of the market today, the S&P 500 has returned 8.3%. Viewed from a historical perspective, that's a great return in just over six months.

But for some companies, an 8.3% return would seem like a gift from above. Below, I'll give you the names of five companies that are some of 2012's biggest losers, why they're down, and at the end, offer access to a special free report detailing stocks that will help you avoid such swoons.

Energy got you down?
While oil has settled in just below $100 per barrel, and natural gas has become the resource of choice given its ultra-low price, other areas of the industry have been suffering. Take a look at how two coal and solar leaders, Arch Coal (NYSE: ACI  ) and First Solar (Nasdaq: FSLR  ) , have fared in 2012 so far.

ACI Total Return Price Chart

ACI Total Return Price data by YCharts

Arch Coal isn't the only coal company feeling a pinch these days. Several have had to shut down or suspend operations at certain sites due to low demand.

Coal has historically been the main resource used to generate electrical power. But with the supply glut of natural gas in the U.S. due to fracking, utility companies have found it more cost-effective to bypass coal and just use natural gas.

Eventually, the supply of natural gas will tighten, and it will again be attractive to use coal. But investors also need to keep an eye on moves from the government, as the Obama administration has made it more difficult for new coal plants to comply with more stringent EPA standards.

First Solar, on the other hand, is simply getting beat out of the market by competitors. Rivals have been able to increase efficiency at a rapid pace. First Solar has not only failed to keep pace with the innovation, but has had trouble lowering costs to remain sustainably profitable.

Weakened demand from Europe has hurt as well, and an import tariff on Chinese solar panels doesn't seem to be doing much good either. This stock's days may be numbered.

Three other losers outside of energy
Lest you think it was just energy companies that had a rough start to the year, here are three more that would rather pretend as if the first six months of 2012 didn't happen.

GMCR Total Return Price Chart

GMCR Total Return Price data by YCharts

Let's start with MAKO Surgical (Nasdaq: MAKO  ) , the company whose RIO Surgical System aims to improve outcomes in partial knee and hip replacement. Twice I've called out the company as ripe for big moves come earnings time, and MAKO didn't disappoint.

After earnings were released in May, the company dipped 37%; a pre-earnings release in June caused another 41% dip. At issue in both releases were missed estimates for both RIO Systems sold and procedures performed. The company said this is because hospitals are waiting to close contracts until after its doctors have been trained. Only time will tell if this is a one-time blip, or a more sustained downturn.

Green Mountain Coffee Roasters (Nasdaq: GMCR  ) , makers of the near-ubiquitous Keurig coffeemakers, has been a victim of its own success in 2012. Since breaking onto the scene over a decade ago, the company's at-home roasters have become wildly popular. But with a key patent set to expire at the end of the year, the company has no sustainable competitive advantage.

That change has already started to rear its head into earnings releases. In early May, the company announced that K-Cup sales were growing much slower than expected. That led to inventory problems and a 40% drop that the company has yet to recover from.

Finally, we have Nokia (NYSE: NOK  ) . While the cellphone maker is already down 63% this year, if you zoom out to the start of 2008, the company's stock has lost over 95% of its value. The onetime leader simply hasn't been able to keep up with market kings like Samsung, Google, and Apple.

The company's Lumia 900 was supposed to be the smartphone that reestablished Nokia's position in the market, but that simply hasn't happened. A clumsy integration of Microsoft's Windows led the company to offer a much lower price point. Nokia also announced that it would be laying off 10,000 workers to reduce costs. Things certainly don't look bright for this has-been company.

There are better places for your money
Clearly, avoiding companies like the five mentioned above is half the battle at winning in the investing game. One of the ways to ensure that your company doesn't suffer such huge losses is to invest in stable, dividend-paying companies. We've just released a special free report detailing three stocks that fit this mold: "3 Dow Stocks Dividend Investors Need." Inside, you'll get the names and tickers of all three companies. Get your copy of the report today, absolutely free!

Learn more about Apple from our senior technology analyst, who spills all on the market's most valuable stock in our brand-new premium report on Apple.

Fool contributor Brian Stoffel owns shares of Apple, Google, and MAKO Surgical. You can follow him on Twitter, where he goes by TMFStoffel.  The Motley Fool owns shares of Google, Green Mountain Coffee Roasters, Apple, MAKO Surgical, and Microsoft. Motley Fool newsletter services have recommended buying shares of Apple, Google, Microsoft, MAKO Surgical, and Green Mountain Coffee Roasters, as well as creating a lurking gator position in Green Mountain Coffee Roasters and bull call spread positions in Microsoft and Apple. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 1951155, ~/Articles/ArticleHandler.aspx, 4/17/2014 3:09:05 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement