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

These 3 stocks, including one biotech with big potential, fell Wednesday despite only modest market declines

Feb 5, 2014 at 7:04PM

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 stock market ended lower today, though the losses weren't anything like the sharp daily declines investors have been getting used to this year. While it may feel like 2014's brought nothing but pain and hardship to your portfolio, the S&P 500 Index (SNPINDEX:^GSPC) is down just 5.1% so far this year. Keep in mind, too, that the stocks entered 2014 at all-time highs, so Wall Street's still doing OK. With little macro news to fuel excitement, the benchmark S&P index fell 3 points, or 0.2%, to end at 1,751.

Of course, in any grouping of 500 stocks, there will be dramatic decliners no matter what the broader market does, and Cerner (NASDAQ:CERN) shareholders were the victims of that phenomenon today. Cerner's stock slumped 6%, even though its quarterly results -- which it announced Tuesday afternoon -- were largely in line with expectations. Sales grew at a 12% yearly rate in the fourth quarter, slightly exceeding forecasts. Projected first quarter earnings of $0.36-$0.37 per share were the culprit here, narrowly missing Wall Street's $0.38 EPS estimate. For stocks with high multiples like Cerner, even minor disappointments like this can send shares spiraling downward.

Gilead Sciences (NASDAQ:GILD) investors were victims of very similar circumstances today, as shares dropped 4.7% after yesterday's earnings. Gilead Sciences basically had a blowout quarter, beating profit estimates by 10% and revenue expectations by 9.5%. But it was what Gilead didn't address that sent shivers through investors' spines. The company's Hepatitis-C treatment, Sovaldi, has been the subject of much speculation on Wall Street; Sovaldi's potential success could act as a catalyst for the stock if it sells well. Gilead, however, chose not to even project what Sovaldi sales would be like in the coming year stoking fears that expectations for the treatment are too high.

Finally, shares of San Antonio-based petroleum refiner Valero Energy (NYSE:VLO) lost 3.9% Wednesday. Sadly there's nothing too dramatic to report about the slump today -- oil and gas stocks were simply the worst performers in the stock market today. On top of that, Valero Energy shares are fairly volatile, and they've rallied more than 25% in the past six months, so investors may merely be cashing in on gains. Trading at a P/E of just 9.3 while paying a 2% annual dividend, Valero still looks like a solid, if low-growth, option for more conservative long-term investors.

2 game-changing biotechs revolutionizing the way we treat cancer
Gilead Sciences may have taken a hit today, but it deserves praise for its efforts in the Hepatitis-C market. The best way to play the biotech space is to find companies that shun the status quo and instead discover revolutionary, groundbreaking technologies. In The Motley Fool's brand-new free report "2 Game-Changing Biotechs Revolutionizing the Way We Treat Cancer," find out about a new technology that big pharma is endorsing through partnerships, and the two companies that are set to profit from this emerging drug class. Click here to get your copy today.

John Divine has no position in any stocks mentioned. You can follow him on Twitter, @divinebizkid, and on Motley Fool CAPS, @TMFDivine.

The Motley Fool recommends Gilead Sciences. 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.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers