With another six weeks to go before we say goodbye to 2022, the S&P 500 is rallying to pull itself out of bear market territory. Whether it ends 2022 back down in the cellar or not, this year was not a good one for investors.

Or was it? While no one likes to see their portfolio in the red, market corrections make for unique opportunities to buy stocks at a discount and ride them to new heights in the bull market that will invariably follow.

Person looking at plunging stock chart.

Image source: Getty Images.

Yet some stocks on the S&P have been real stinkers. The worst four performers in the index have lost an average 71% of their market value this year.

But that puts investors in a quandary: Although these stocks are likely cheaper than they have been in years -- or ever -- stocks that drop so dramatically often do so because there is a problem with their business that has caused the market to lose faith in them.

So let's take a closer look at the four worst-performing stocks in the S&P 500 and see whether they are bargains -- or should still be avoided at all costs.

1. SVB Financial Group (down 69.3%)

Even if you never heard of SVB Financial Group (SIVB.Q -1.64%), once you understand that SVB stands for Silicon Valley Bank, you completely understand why its stock is in the toilet. As a commercial bank primarily servicing the technology and life sciences industries, its stock has suffered the same fate as many of its customers. 

The problem with SVB is its customers are suffering from a decline in public and private investment in their businesses as their cash burn rates rise. So while the bank ought to benefit from rising interest rates, its clients are burning through cash at a sustained rate that's offsetting whatever benefit it might see.

Management also said it could take upwards of a year for the cash burn rate to return to a more manageable level, which is why SVB has seemingly little near-term insight into its operations. Every single quarter in 2022 has seen management revise its outlook.

So while Wall Street remains generally upbeat on the stock, with many analysts maintaining buy ratings, individual investors might want to wait awhile because there remains a level of uncertainty surrounding its operations that could mean SVB's stock price goes even lower.

Person wearing virtual reality headset.

Image source: Getty Images.

2. Meta Platforms (down 69.8%)

Speaking of Silicon Valley stocks that have been trashed, Meta Platforms (META 0.11%) has lost almost 70% of its value because CEO Mark Zuckerberg's all-in bet on the metaverse is looking like a massive money-sucking waste. 

Meta just announced it was firing 11,000 employees, some 13% of its 87,000 workers, in an attempt "to become a leaner and more efficient company" after its metaverse-oriented Reality Labs suffered through $9.4 billion in operating losses on just $1.4 billion in revenue. It has a near-$15 billion loss run rate over the past four quarters.

Or as Bank of America analyst Michael Hartnett put it, "The metaverse...where stocks go to die."

The bigger problem for Meta is Zuckerberg refuses to cut spending on the project -- he's committed to spending even more in 2023 -- and the company forecasts Reality Labs losses will grow even larger. The rest of its business, however, also could sag.

While Meta's Facebook still has a huge audience, it's dead to kids these days, according to the latest Piper Sandler survey of teen preferences. Just 2% of teens are on the social networking site, and though 20% are on Meta's Instagram, TikTok is pulling away as the favorite, with a 38% share of teens. 

Although I wouldn't call the metaverse a Zuckerberg vanity project, until Meta chooses to rein in this money-losing operation, there doesn't seem to be much hope for a turnaround in its stock.

3. Generac (down 72.5%)

The market's gone dark on generator manufacturer Generac (GNRC -0.87%), as the probability of an economic recession takes a toll on consumers. Inflation and rising interest rates are a concern for customers who might be interested in installing a home standby generator (HSB), and it's causing inventories to rise.

Generac doesn't see the situation sorting itself out anytime soon and has offered lower guidance for the rest of the year. It's also suffered from the bankruptcy of one of its customers, Pink Energy, a clean energy outfit, though analysts remain bullish on the long-term potential of the company even as they cut their price targets.

Many firms note rising grid instability as a factor that will push consumers and commercial interests to seek out Generac's HSBs over time. Though the company jumped on clean-energy alternatives, Pink's bankruptcy and subsequent ending its relationship with Generac will damage that opportunity.

Analysts also look to the recent passage of the so-called Inflation Reduction Act, which codified many components of the Green New Deal that finances many clean energy projects that could benefit Generac in the future.

Still, despite trading at just 10 times next year's earnings, Generac is also priced at twice its estimated earnings growth rate and over 130 times the free cash flow it produces. It's likely investors have time on their side before buying in on this stock.

4. Align Technologies (down 73.4%)

Align Technologies (ALGN -5.63%) has been on a long slide lower for the past year, and the market for its dental alignment solutions, like the original Invisalign retainer, hasn't improved.

Because half of its revenue is derived overseas, currency exchange rates -- the worst in its history -- have hurt performance. Meanwhile, China is Align's second-largest market, and the country's zero-tolerance policies toward COVID have wrecked its business there. It noted dental offices have been completely closed in China for extended periods of time as a result of the strict adherence to the regulations.

Here at home, it's faring only somewhat better because of the economic situation. While it installed its 14 millionth Invisalign device in the third quarter, consumers are simply gripped with too much uncertainty at the moment, and it is impacting sales. 

Align Technologies maintains it continues to execute on its long-term growth plans, but there doesn't appear to be any catalyst for that growth in the near future that would give investors a reason to smile.