Now that the dust of February has settled, investors can start looking for some stocks that had an abysmal month. While the Nasdaq-100 fell 2.6% in February, a few stocks had an even worse performance.
The stocks claiming this "honor" were JD.com (JD 0.36%), SiriusXM (SIRI -1.59%), and Moderna (MRNA -0.34%). But are any of them worth buying now? Let's find out.
JD.com
The worst-performing Nasdaq-100 stock in February was JD.com, down 27%. JD.com is China's largest online and overall retailer, so its dynamics significantly differ from those of a company based in the U.S.
However, it lost some market share during the pandemic, and the company wants it back. Armed with about $1.5 billion in subsidies, JD.com plans to subsidize purchases to entice customers onto its platform. This strategy might work over the long term, but it will hurt its profitability in the short term, which is what caused investors to dump the stock throughout the month.
JD.com's troubles continued through March. The stock fell 11% after it reported earnings on March 9, even though revenue increased by 7% and operating income swung from a loss of 0.4 billion RMB to a profit of 4.8 billion RMB in Q4.
Investing in China can be difficult, so I avoid all Chinese companies. This dynamic likely explains why JD.com's stock is so cheap at 13 times free cash flow. Many investors aren't willing to take the risk, but the rewards could be great if you get it right.
SiriusXM
SiriusXM didn't have a great start in February, reporting lackluster Q4 earnings on Feb. 2. Revenue only rose 4% in 2022, and net income fell by $120 million. Still, it wasn't a bad year for SiriusXM, considering the tough advertising market.
But the market still has no confidence in SiriusXM, and its price-to-earnings ratio sits at a cheap 12.1 times. To add to these concerns, Sirius axed about 8% of its workforce in March.
While the stock is fairly cheap and produces solid cash flows, SiriusXM will likely never receive any respect unless it creates a new product or puts up impressive growth numbers. The focus in the investment world is on streaming, not radio. So unless SiriusXM can do something to flip the narrative, the stock will continue to have its struggles.
Moderna
Moderna used to be a company no one knew about. But thanks to its COVID-19 vaccine, it became a household name. However, that catalyst is wearing off.
MRNA Revenue (TTM). Data source: YCharts
With Moderna's revenue and profit starting to fall now that the demand for its vaccine isn't what it used to be, it will have to find new revenue streams. With plenty of projects in the pipeline, including a flu and RSV vaccine, Moderna may find another source of revenue in the future.
However, these projects will be subject to rigorous clinical trials and will likely receive extreme scrutiny after the quick rollout of Moderna's COVID-19 vaccine.
The roller-coaster ride for Moderna's stock is far from over, and current investors need to survey the landscape to see if they are willing to stay with the stock for the long term. If not, there might be greener pastures in which to invest.
All three stocks had a rough February, but I don't see any catalysts in the near future that will turn this trio around. There are plenty of other stocks you should consider before looking at these three.
