The market has seen an incredible run off its lows over the past four years. Chances are good that if you've owned a diversified portfolio of investments, you're sitting on a handsome return. However, it wasn't all sugar and spice for a handful of companies within the broad-based S&P 500 in the first-quarter. The index closed at an all-time high on Thursday, but these five companies were the worst of the worst in the first quarter. The good news is that one has a very good chance at rebounding in the second quarter.

Cliffs Natural Resources (NYSE:CLF) (50.5%)
It was a horrendous quarter for Cliffs, a miner of iron ore and metallurgical coal, which lost half of its value. A cornucopia of analyst downgrades shelled the company after it reduced its quarterly dividend by a whopping 76% to $0.15 from $0.625. The most recent downgrade came courtesy of Morgan Stanley, which warned that new iron ore supplies in the U.S. may reduce iron ore pricing. Iron prices are well off their highs of $187 per dry metric ton, but they've also crept off their recent lows of just $99 per dry metric ton set last September. 

J.C. Penney (NYSE:JCP) (23.3%)
As unbelievable as this might be, struggling retailer J.C. Penney shed only 23% in the first quarter despite reporting what I deemed to be the worst retail quarter ever. Its fourth-quarter report highlighted a 28.4% decline in total sales, a nearly 32% drop in same-store sales, and a 34.4% tumble in direct-to-consumer sales. Penney CEO Ron Johnson has backtracked on the company's no-sale pricing policy, but it remains to be seen if customers will return or if the damage has already been done. 

Peabody Energy (NYSE:BTU) (20.3%)
It definitely wasn't a kind quarter to coal producers, with Peabody shares shedding 20% after reporting dismal fourth-quarter results in late January. Coal prices have been under serious pressure because of low-cost natural gas, which has persuaded electric utilities to make the long-term switch from coal to natural gas. Reduced stockpiles of coal have helped somewhat stabilize prices, but the prospect of higher costs in its Australian mines and stagnant coal prices didn't sit well with its shareholders this quarter.

U.S. Steel (NYSE:X) (18.1%)
Another underperformer, another commodity-based company! This time it's U.S. Steel, which saw its shares dip by 18% on the quarter as weak steel prices and tempered demand both domestically and overseas weighed on results. For 2012, U.S. Steel's net loss widened to $124 million from $53 million in the previous year, but that's primarily attributed to a whopping $353 million loss on the sale of U.S. Steel Serbia.

Garmin (NASDAQ:GRMN) (17.9%)
Finally, navigation and GPS device maker Garmin shed nearly 18% during the quarter after its full-year outlook failed to impress investors. Garmin forecast a profit of just $2.30-$2.40 for the year on revenue of $2.5 billion to $2.6 billion as compared with estimates at the time calling for $2.89 in EPS on $2.77 billion in sales. Garmin continues to offer investors a premium dividend but is falling short in the innovation department, with numerous apps on smartphones and tablets replacing its products.

Source: Finviz.

Which company has the best chance to bounce back?
As some of the greatest minds on Wall Street have stated before, stocks drop for a reason. As we've seen from these brief summaries, the drop in all five cases appears well justified. However, one company among the five has a very strong chance of a rebound in the coming quarters.

That company is certainly not J.C. Penney. I didn't even know it was possible to deliver a same-store-sales drop of 31.7% in a single quarter, but Penney proved me wrong. Management appears completely lost as to what to do. CEO Johnson says he'll let the customer dictate Penney's plans moving forward, but that seems a tough sell considering that Johnson attempted to dictate how customers should react since taking over.

Garmin is another company we can easily extract from the bounce-back list. Garmin is investing heavily in research and development to drive sales, but its product is antiquated next to today's smartphones and tablets. In areas where reception is limited (e.g., the ocean), Garmin still offers incredible value, but it's likely that its total sales potential will continue to dwindle.

U.S. Steel is another company that can be pretty easily removed from this equation. It isn't that I don't like steel companies (because I do); it's that U.S. Steel is one of the worst of the bunch. With one of the highest debt-to-equity ratios among its peers, U.S. Steel has a long way to go in terms of paying down its debt before it's back on my buy radar.

What this came down to is a tough call between Cliffs Natural Resources and Peabody Energy. Ultimately, I've chosen Cliffs Natural Resources, the first quarter's worst performer, as my best bet to rebound moving forward.

I like Peabody; don't get me wrong. However, I'm concerned that Peabody's overseas costs will get out of hand and depress its margins for the next couple of quarters.

I don't have those same worries with Cliffs Natural, which has its costs under control -- especially with a 76% dividend cut -- and which cut its net debt in half with a 10.4 million secondary share offering. A $157 billion infrastructure bill in China aimed at boosting GDP growth, coupled with a revival in homebuilding activity in the U.S., should have both met-coal -- which is used to strengthen steel -- and iron ore prices stabilizing and rising in no time. In fact, iron ore prices in February were at their highest levels since September 2011. At just eight times forward earnings and with a yield nearing 3%, Cliffs Natural is a good bet to rebound strongly in the coming quarters.