This has generally been a good year for investors, but there are many strong stocks trading lower this year. Shares of JD.com (JD 2.82%), Walt Disney (DIS 1.46%), and MercadoLibre (MELI 5.12%) are surprisingly selling right now for less than they were when the year began.
They may be discarded by investors, but all three companies can bounce back into favor with strong quarterly updates later this month. Let's take a closer look.
Chinese growth stocks have taken a hit this year, but not every former darling has what it takes to get back on track. JD.com is an e-tailing giant. There are 539.1 million annual active accounts relying on JD.com, a healthy 27% increase over the past year.
China's government has cracked down on things including for-profit education, social media platforms, and the amount of time that the country's youth spend gaming. Do you really think e-commerce is going to be on China's naughty list?
Revenue rose a better-than-expected 26% in its latest quarter. Adjusted earnings -- while lower -- still trounced Wall Street profit targets the way that JD.com has done over the past year. The stock is trading just 6% lower in 2021, so it's faring better than many of the more challenging Chinese growth stocks. The e-tail juggernaut still deserves better than to be swept up in the malaise of some of the country's sinkers with teetering fundamentals. JD.com should win over some more skeptics when it reports third-quarter results later this month.
Compare 2020 to 2021 for Disney and it's a lot like the the media giant's body-switching classic Freaky Friday film. The stock moved higher last year despite its theme parks, cruise ships, and theatrical businesses going through pronounced lulls. The shares have retreated in 2021 despite Disney starting to fire on all cylinders.
Like JD.com, Disney's year-to-date slide doesn't amount to much. It's also trading just 6% lower in 2021 through Monday's close. It's just an odd place for the media giant to be in a year when it's dominating the box office with its theme parks and cruise ships gaining positive momentum.
Latin America's leading online marketplace operator is having an off year. It's trading 11% lower in 2021, the worst performer of the these three stocks. It will be the first of these three names to report fresh financials this month.
MercadoLibre is coming through with monster growth. Revenue rose 103% to $1.7 billion in its previous quarter, up a still beefy 94% if we translate the top-line results to U.S. dollars. Revenue more than doubled during the same period the year before that, so it's not stacking this monster growth on top of a weak year-ago performance.
MercadoLibre's report on Thursday should be solid. Beyond the namesake marketplace that has seen its unique active users rise 47% to 75.9 million over the past year, the company operates even faster-growing online payment (Mercado Pago) and order fulfillment (Mercado Envios) businesses.
Whether it's the international e-commerce that JD.com and MercadoLibre bring to the table or Disney's iconic entertainment properties, it's hard to bet against these three historically successful giants when they're down. They'll be back, and strong financial reports later this month can make the recovery happen sooner rather than later.