While the S&P 500 is in positive territory year-to-date, not every stock has benefited from the prosperity. In fact, shares of AmTrust Financial Services (AFSI), Nabors Industries (NBR 0.65%), and Rite Aid (NYSE: RAD) have all been cut in half in 2017. Here's a look back at why the markets have thrashed these stocks this year.
Image Source: Getty Images.
AmTrust Financial Services -- Down 46%
AmTrust's troubles kicked off in February when the company said that it needed more time to file its annual report. Management said the delay was caused by inaccuracies and weaknesses in its internal controls. What's more, the company said it would making corrections to its filings in prior years, too.
If that wasn't troubling enough, just two months later suspicions were raised about the company's accounting practices in The Wall Street Journal. The report was published by a whistle-blowing auditor and famed forensic accountant Harry Markopolos. That group believed that the company's accounting issues could have overstated operating income by as much as $277 million, which, if true, is troubling news.
AmTrust didn't do itself any favors when it released its first-quarter earnings report, either. The results badly missed the mark as EPS of $0.32 per share were about half of $0.60 that Wall Street wanted to see.
While AmTrust has made a number of moves recently to address its troubles head on, it isn't hard to figure out why investors have lost faith in this business.
Nabors Industries -- Down 51%
A series of poorly received earnings reports have caused Nabors' stock to head in reverse throughout 2017.
The company kicked off the year with a tough fourth-quarter report that featured a $245 million charge related to asset impairments. While the charge caused net income to plunge, the company's results absent those one-time costs were mixed. Nabors' active rig count rose but those gains were offset by margin declines. Investors were less than thrilled with the news.
The company followed up that report with disappointing results in the first quarter, too. While demand for drilling activity is rising -- which in theory should be good for Nabors -- the company has been forced to spend heavily to reactivate its fleet. Those start-up costs are putting even more pressure on margins, so Nabors is still producing heavy losses.
On the plus side, the uptick in demand for drilling activity is likely to be a net-positive for the company once its fleet is fully up and running. Of course, the company is likely to continue setting fire to cash until that time, so this is a stock that investors should probably approach with caution.
