4 Big 2013 Winners That Are Struggling in 2014

Big gains don't always last, and these S&P 500 stocks have fallen sharply in the first two months of the year after big gains last year. Find out why.

Mar 1, 2014 at 11:31AM

The S&P 500 (SNPINDEX:^GSPC) is once again at record highs, having recovered sharply in February on the strength of several key sectors. But for many of the stocks that helped propel the S&P (^GSPC) higher last year, 2014 has been a nightmare. In particular, Best Buy (NYSE:BBY) and GameStop (NYSE:GME) have lost roughly a third and a quarter of their value in just two months, while Starbucks (NASDAQ:SBUX) and Amazon.com (NASDAQ:AMZN) have made more modest retracements of around 10% so far this year after solid results in 2013.

For Best Buy (BBY), holiday-quarter performance was the primary reason for the retailer's underperformance. Amid pressure from heavy promotional activity throughout the industry, the company saw a 0.8% decline in same-store sales, and that announcement caused the stock to almost 30% in a single day. Even as the company has seen some success in bolstering its online sales, Best Buy (BBY) will have to show that the progress it made in 2013 wasn't just a single-year fluke that won't be sustainable in 2014 or beyond. In that vein, the company's more recent full earnings release gives investors some hope that it will be able to recover fully, given enough time.

GameStop (GME) has had to deal with the same general problems, with weak sales during the holiday season being especially disappointing given the release of two major new game consoles into the video game market. Yet GameStop's (GME) problems are also more fundamental, as console-makers and video game designers aim to eliminate the retailer's middleman status and offer more direct conduits for gamers to get their hands on new titles. With such a fundamental threat to its business model, the video game retailer once again has to find new ways to get people into its retail locations.

Meanwhile, Starbucks (SBUX) and Amazon (AMZN) have had more modest setbacks lead to small corrections for their shares. In Starbucks' case, rising coffee prices pose a threat, as does the trend toward for less traffic in brick-and-mortar retail where its coffee shops often rely on shoppers for business. Yet the coffee giant hopes that its popular loyalty program and its diversified mix of beverages will keep driving customers through its doors. Amazon (AMZN) had an ugly earnings report, with revenue growth falling short of investors' ambitious expectations. Yet as usual, the online-retail giant is casting its lot on its long-term prospects, continuing to willingly sacrifice immediate profits for the sake of future growth. Investors occasionally lose patience with that approach, but eventually, Amazon (AMZN) will shift toward a more present-focused strategy that could produce the profits that investors have long dreamed of.

Obviously, it's too early to be certain after just two months whether 2014 will prove to be a lasting reversal of fortune for these four stocks. Still, with early signs pointing to some new challenges, these companies will have to work harder to avoid giving back more ground in the months to come.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Starbucks and owns shares of Amazon.com, GameStop, and Starbucks. 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.

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