Why 2012 Spelled Disaster for These Stocks

After running a screen on the worst-performing consumer goods stocks of 2012, J.C. Penney was one of the most disappointing. If you're thinking the pendulum has swung too far and that J.C. Penney is a buy today at these prices, you aren't alone. But don't make a move until you hear what Jeremy Bowman, The Motley Fool's top analyst on the company, has to say first. Simply click here now for instant access to his premium research report. .


Chris Hill: When we're looking at consumer-good companies in 2012, what are the companies that had a 2012 that they are glad is ending? They'd just as soon forget the year they just had?

Austin Smith: It's definitely interesting. When I ran a screen of those stocks that had performed both best and worst, you see genre clusters at the top and bottom. At the top was all housing stocks, and at the bottom it's basically for-profit education stocks, and broken retailers.

What I mean is that, by taking a look at this list at the time that it was run a few days ago, we have Apollo Group down 62%, [Deckers Outdoor] is down 48, Best Buy down 48, J.C. Penney 47 down, DeVry down 31%.

Some of the common themes I think that are pushing that down ... we see the entire for-profit sector being weak. It's come under a lot of scrutiny recently. [Bridgepoint Education] recently lost their accreditation, we see the government definitely getting more strict with how these funds are going to be issued, and a lot of these companies are bumping up against their three-year cohort default rate limits, so it's kind of a scary time to be in this space, certainly.

When you've got tightened government spending, it's a scary place to be in. As far as down-and-out retailers, it's a story we've talked about for a long time.

Chris: Sure, yeah.

Austin: Companies like Best Buy ... just broken models. You're a showroom for []. Companies like J.C. Penney, a very dowdy image, and that's difficult to turn around. Ron Johnson has been plowing money into it, but it's really hard to correct a dowdy image when the entire bricks-and-mortar retail sector is weak as is, and even those companies that are strong are having difficulty.

The two sectors, I think, that have 2012s that they wish they could forget are going to be for-profit education, and some weak bricks-and-mortar retailers.

Editor's note: Ashford University (owned by Bridgepoint Education) is currently accredited by the Higher Learning Commission (HLC) of the North Central Association of Colleges and Schools. Earlier this year, Ashford applied for initial accreditation by the Western Association of Schools and Colleges (WASC). While that application was initially rejected, WASC has permitted Ashford to reapply, noting that Ashford has already initiated many of the processes required to achieve WASC accreditation. 

Read/Post Comments (0) | Recommend This Article (1)

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.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2158496, ~/Articles/ArticleHandler.aspx, 10/22/2016 8:01:40 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...

Today's Market

updated 22 hours ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/21/2016 4:00 PM
JCP $8.84 Up +0.18 +2.08%
J.C. Penney CAPS Rating: *
AMZN $818.99 Up +8.67 +1.07% CAPS Rating: ****
APOL $8.87 Up +0.38 +4.48%
Apollo Group CAPS Rating: *
BBY $39.46 Down -0.02 -0.05%
Best Buy CAPS Rating: *
BPI $6.85 Down -0.19 -2.70%
Bridgepoint Educat… CAPS Rating: **
DECK $54.15 Down -2.72 -4.78%
Deckers Outdoor CAPS Rating: ****
DV $22.66 Up +0.33 +1.48%
DeVry CAPS Rating: **