Even with all the gloom and doom over European sovereign debt and deadlock in Washington, the stock market has held up reasonably well in 2011. But that doesn't mean that every stock managed to avoid losses. Even among the best-known companies in the market, you'll find plenty of stocks that suffered throughout the year and appear poised to end 2011 on a sour note.
Today, let's take a closer look at five stocks from the Dow Jones Industrials
2011 YTD Return
% Above 52-Week Low
Bank of America
Source: Yahoo! Finance. Prices as of Dec. 8 close.
Oddly enough, there doesn't seem to be any obvious connection among all these stocks. With banking, technology, mobile, and industrial stocks all included on the list, these companies span the full breadth of the Dow's reach. Yet even within the Dow, other stocks in the same sectors are doing much better. For instance, even with Microsoft's lackluster performance, other Dow tech stocks, including Intel and IBM, have performed much better in 2011.
Still, there are good reasons why each of these stocks is trading near their lows for the year. Let's look at all five of them to see what held them back in 2011:
- Bank of America has faced constant concerns from analysts that it will need to raise new capital, despite its insistence to the contrary. Yet the company received a $5 billion investment from Warren Buffett in August and has made other moves to sell off assets. With everything from trouble in Europe to the debit-card fee fiasco, B of A has a lot on its plate.
- Alcoa is a logical underperformer in a slow economy. But the aluminum-maker faces longer-term challenges, with auto and airplane producers starting to use rival materials like plastic and carbon-fiber composites to gain fuel efficiency.
- General Electric has come a long way from the dark days of the financial crisis, when it appeared that the conglomerate's finance business would pull down the rest of the industrial giant. Now, the company's dealing with potential defense cuts as well as overall economic doldrums.
- Microsoft is still the undisputed leader in office software, but it's been slow on the uptake to get onto smartphones and other mobile devices. Investors are scared that its partnership with Nokia
will be too little too late for Microsoft to establish itself in the mobile market. (NYSE: NOK)
- AT&T has struggled lately as its attempted merger with T-Mobile now looks almost certain to fail. Yet the company is stubbornly continuing on rather than giving up on the merger, despite having taken a massive $4 billion charge against earnings in anticipation of potentially having to pay an even larger breakup fee to T-Mobile.
Things can only get better
These stocks may not have hit it out of the park in 2011, but that doesn't mean they won't do better in 2012. Although it's never good to start off a new year on the wrong foot, there's nothing stopping these companies from reversing course and providing better returns to shareholders next year.
Still, you might feel more comfortable going beyond these companies to search for top-performing stocks. You'll find one great lead in our newest special report, "The Motley Fool's Top Stock for 2012." This report is absolutely free, and even more important, it's not the sort of thing you want to wait to read. Click here and get a head start on your fellow investors.
Fool contributor Dan Caplinger does his best never to whimper. You can follow him on Twitter here. He doesn't own shares of the companies mentioned in this article. The Motley Fool owns shares of IBM, Microsoft, Intel, and Bank of America, as well as calls on Intel. Motley Fool newsletter services have recommended buying shares of and creating bull call spread positions on Intel and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always goes out with a bang.