Today's 3 Worst Stocks in the S&P 500

Some of last year's top performers end in the dregs of the stock market today.

Jan 7, 2014 at 7:50PM

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

The S&P 500 Index (SNPINDEX:^GSPC) finally broke its nasty three-day tumble into the new year Tuesday, ending in the green as the U.S. November trade deficit narrowed and tech leaders began showing off their new wares at the Consumer Electronics Show in Las Vegas. The S&P ended with 11-point, or 0.6%, gains, finishing at 1,837, or just 0.6% off the all-time highs it set going into 2014. 

Video-streaming service Netflix (NASDAQ:NFLX) was, for a change, not a boon to the benchmark index, ending as the day's absolute worst performer. It's quite a role reversal for Netflix stock, which was the S&P's single largest gainer in 2013, rocketing 298% as it posted impressive subscriber growth. Netflix came into its own last year with critically acclaimed original series like House of Cards, and Orange Is the New Black. That said, shares were off 5.6% Tuesday, after Morgan Stanley downgraded the stock to an "underperform" rating, lamenting an onslaught of competition that threatens to slow subscriber growth and jack up the prices of acquiring new content.

Michael Kors (NYSE:KORS), one of the newer kids on the block of luxury fashion apparel, is also one of the newest additions to the S&P 500 Index, which it joined less than two months ago. Alas, like Netflix, Michael Kors stock couldn't escape the wrath of a downgrade: shares tumbled 3.8% after a Citi analyst downgraded the stock to "neutral" from "buy," noting Kors' remarkable run-up had left the stock fairly priced. Unfortunately for Michael Kors enthusiasts, the downgrade only made the stock cheaper, not the handbags.

Lastly, shares of big-box electronics retailer Best Buy (NYSE:BBY) tumbled, shedding 2.6% today. Like Netflix, Best Buy posted a stellar 2013, ending as the third best performer in the 500-stock index on gains of 237%. Now of course, those sorts of gains can't be expected every year (or frankly, every decade), but outperformance becomes even harder when industry peers start moaning about how awful holiday sales were. The offending peer, the $350 million Indianapolis electronics store hhgregg, is the sort of company Best Buy could swallow whole if it were looking to eat healthy in the new year. Size aside, Wall Street fears the steep same-store sales slump experienced by hhgregg could be endemic to brick-and-mortar electronics retailers, which could make for an ugly sell-off at the end of February when Best Buy reports quarterly results.

The death of Wal-Mart: The real cash kings changing the face of retail
It wasn't the best of days for Michael Kors and Best Buy. That said, today's performance doesn't affect their long-term potential; to learn about two retailers with especially good prospects, take a look at The Motley Fool's special free report: "The Death of Wal-Mart: The Real Cash Kings Changing the Face of Retail." In it, you'll see how these two cash kings are able to consistently outperform and how they're planning to ride the waves of retail's changing tide. You can access it by clicking here.

Fool contributor John Divine owns shares of Michael Kors Holdings. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.

The Motley Fool recommends Michael Kors Holdings and Netflix and owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information