Please ensure Javascript is enabled for purposes of website accessibility

Today’s 3 Worst Stocks in the S&P 500

By John Divine – Feb 6, 2014 at 7:08PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

From Chesapeake Energy to Gilead Sciences, today's underperformers failed to impress investors

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

An hour before the opening bell this morning, jobless claims numbers for last week hit the Street. They showed claims falling from 351,000 to 331,000 for the week ending February 1. An hour later, the stock market did something it hadn't done much of this year: it rallied. In fact, the S&P 500 Index (^GSPC -0.03%) went on to post its best day of 2014, surging 21 points, or 1.2%, to end at 1,773.

 Of course, no matter how healthy the tree is, there are always a few bad apples. Chesapeake Energy (CHKA.Q) stock was just such an apple on Thursday, as shares tumbled 6.9% following an anemic 2014 outlook. Chesapeake Energy is, from an outside perspective, in an enviable position, being one of the top producers of natural gas in the U.S. But the domestic energy revolution is facing a setback this winter, as unusually harsh weather has hampered production at precisely the time when natural gas prices are spiking to highs not seen in the last five years. In other words, this is exactly the wrong time for production to start slumping. 

Another energy company, Tesoro (ANDV), also slipped big time today, losing 4.7%, as the refiner reported underwhelming earnings. Now, when I say "underwhelming," I really mean "horrendous." Analysts were calling for earnings per share of $0.31. Tesoro instead earned a measly $0.04 per share. The main culprit was dramatically reduced margins, which cratered more than 60% for fuel sales. Tesoro, which both refines oil and sells fuel at company-operated gas stations, was briefly and bizarrely forced by market conditions in California to buy fuel at high prices and then sell it for a loss. Not surprisingly, this business model produced disappointing results. 

Lastly, California-based biotech Gilead Sciences (GILD 0.98%) fell 2.1% Thursday, ending as one of the S&P's worst performers for a second straight day. Interestingly, Gilead Sciences actually reported blowout earnings late Tuesday, but shares have since sold off. That's because the stock market's all about expectations, and one of Wall Street's aspirations for Gilead is the success of its Hepatitis-C treatment Sovaldi. When the company failed to include Sovaldi sales projections in its outlook for the coming year, some shareholders got antsy and decided not to bet on the drug's success.

John Divine has no position in any stocks mentioned. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.

The Motley Fool recommends Gilead Sciences. 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 Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

S&P 500 Index - Price Return (USD) Stock Quote
S&P 500 Index - Price Return (USD)
^GSPC
$4,026.12 (-0.03%) $-1.14
Andeavor Stock Quote
Andeavor
ANDV
Chesapeake Energy Stock Quote
Chesapeake Energy
CHKA.Q
Gilead Sciences Stock Quote
Gilead Sciences
GILD
$86.26 (0.98%) $0.84

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
356%
 
S&P 500 Returns
118%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.