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The Biggest Losers of 2008

By Christopher Barker – Updated Apr 5, 2017 at 8:02PM

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Sifting through the wreckage for a diamond in the rough.

Good riddance, 2008! While investors may wish to box up the memories and commit them to oblivion, a quick glance back can provide valuable insight into the year ahead.

Incredibly, a simple query using the stock screener tool at Motley Fool CAPS reveals that roughly 950 companies have shed at least 75% of their market cap over the past year. Just as we would skim through a junk pile before hauling it to the dump, though, let's look at some of the year's worst-performing stocks, in case they include some diamonds in the rough.

We'll employ the collective wisdom of 120,000-plus CAPS investors to see which losers they believe will eventually become winners. We can use the CAPS stock screener to identify companies trading at least 85% below where they were a year ago, while still retaining the favor of CAPS members with at least 1,000 outperform picks and a four-star or five-star rating -- the best. Finally, to peek at their balance sheets, we'll query companies with at least $1 per share in cash and a debt to equity ratio below 1.25. According to CAPS members, here are some of the best of the biggest losers:


52-Week Price Change

CAPS Rating (5 max)

LT Debt to Equity Ratio

Cash per Share

First Marblehead (NYSE:FMD)





Excel Maritime Carriers (NYSE:EXM)





Suntech Power Holdings (NYSE:STP)





Rio Tinto (NYSE:RTP)





Navios Maritime Holdings (NYSE:NM)





Chicago Bridge & Iron (NYSE:CBI)





Manitowoc (NYSE:MTW)





Data compiled from Motley Fool CAPS on Dec 5, 2008.

First Knucklehead
At first glance, with a market value below the company's cash on hand, student loan specialist First Marblehead may seem like a compelling value. More than 3,000 CAPS members apparently agree. However, its liquidity may soon be soaked up by a troubled subsidiary, and the company's $500 million student loan portfolio faces a tough road ahead. The lingering credit crisis threatens to send default rates higher as debt-ridden graduates encounter a weakening job market. I believe the student loan market remains in a state of fundamental decline, and I recommend tossing this one out.

The shippers have gone dry
While I recently highlighted the potential relative strength of dry bulk shipper Navios Maritime over some of its competition, the perfect storm that has battered the entire industry has only strengthened further. Between diminished global commodity demand, charter rates that are leading owners to idle their vessels, and the possibility of several debt-laden shippers breaking loan covenants or even going private, the picture looks little better heading into 2009. Despite their continued support from the CAPS faithful, I urge Fools to approach both Navios and Excel with a metric tonne of caution.

We'll see the sun again in 2010
Persistent cloud cover has sent investors fleeing from solar stocks lately, but not the talented bunch at CAPS. With more than 4,000 outperform picks, Suntech Power enjoys the largest following among these biggest losers, and I share their optimism. As fellow Fool Toby Shute pointed out, the majority of anticipated revenue declines represent delayed sales rather than canceled ones, while reduced capital expenditures will likely boost efficiency and bring grid parity within closer reach.

Don't dive into the Rio
Speaking of the sun, Rio Tinto is a premier global miner of pretty much everything under it. A year ago, I would have declared it impossible for this behemoth of the then-sizzling commodity bull market to make the list of 2008's biggest losers. The dramatic implosion of prices for everything from copper to aluminum has knocked this company straight onto its back, raising concerns over the debt burden it shouldered during its acquisition of Alcan in 2007. With deep cuts to the company's capital expenditures and workforce on the horizon, Rio could face a bumpy ride into early 2009.

The erector set
While I've given less consideration to crane-maker and shipbuilder Manitowoc than its more specialized competitors, the numbers point to a potential bargain in these shares. They sport the lowest debt-to-equity ratio of the group, plus cash holdings representing more than one-third of the entire market capitalization. A similar case can be made for energy infrastructure player Chicago Bridge & Iron. Beyond the significance of their financial moats, I view both companies as potential beneficiaries of a likely worldwide focus upon infrastructure spending in response to economic weakness.

The Foolish final word
Whether or not some of 2008's biggest losers become next year's winners, it's clear that 2009 will remain a challenging environment for investors. Featuring thought-provoking blogs, insightful stock pitches, and an array of helpful research tools, Motley Fool CAPS can help keep next year's biggest losers out of your portfolio. See you there!

Further Foolishness:

Chicago Bridge & Iron is a Motley Fool Global Gains recommendation. Suntech Power is a Rule Breakers selection.

Fool contributor Christopher Barker thinks all Fools are winners. He can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He owns no shares in the companies mentioned. The Motley Fool has a victorious disclosure policy.

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