I don't always get it right, and in the spirit of accountability I should take myself to task for getting it mostly wrong in my final article of 2014. I singled out five stocks that I felt would bounce back in 2015. All five companies had seen their stocks lose at least a third of their value through 2014, and the catalysts seemed to be there for a rebound in the year ahead.
Two of them did bounce back, posting double-digit percentage returns in the process. CalAmp (CAMP +0.00%) has bounced back since shedding 37% of its value in 2014. The wireless communications specialist has come through with a 13% gain this year. CalAmp is living up to the Internet of Things hype this year, beating Wall Street's profit targets in three of the past four quarters.
Chuy's Holdings (CHUY +0.00%) was an even bigger winner on that list, up 59% this year. The growing chain of casual and festive Mexican restaurants continues to post positive comps. It crashed in 2014 as margins started to contract, but earnings began to grow faster than revenue in 2015. Chuy's is a market darling again.
CalAmp and Chuy's turned things around in 2015, but the other three stocks got clobbered. Let's take a closer look at my three misfires.
SodaStream (SODA +0.00%), down 13% in 2015
The company that briefly made home-based beverage carbonation cool saw its stock shed more than half of its value last year. The stock's hit this year wasn't nearly as a bad, but SodaStream's fundamentals continue to deteriorate. Sales of starter kits and flavors continue to shrink, even in SodaStream's largest market, Europe.
The silver lining here is that SodaStream continues to show growth in carbonator refills. This suggests that its installed base is still actively fizzing up still water. However, weakening soda consumption trends in general and new competition will make 2016 a challenge.
Twitter (TWTR +0.00%), down 37% in 2015
One of the hottest IPOs of 2013 tanked 41% last year, and it's following that up with another slide in 2015. Slowing user growth has been an issue at the former dot-com darling. Twitter has also failed to monetize its platform as quickly and effectively as the market was expecting.
Twitter is shaking things up. Co-founder Jack Dorsey became its new CEO in October. Twitter is still growing at a healthy rate, and it has consistently landed ahead of analyst profit projections. However, the stock's still working off the lofty valuation it commanded at its peak shortly after its IPO. Now that it's a broken IPO -- trading below its initial price of $26 -- a more sound valuation argument can be made.
Groupon (GRPN +5.11%), down 62% in 2015
The biggest dud on the list was Groupon. The daily deals leader followed up a rough 2014 where it lost 33% of its value with a brutal 2015.
Things haven't gone Groupon's way this year. It's been retreating out of international markets and going through layoffs. Settling on its own COO to serve as its new CEO failed to impress the market that may have been holding out for a seasoned outsider.
Groupon's cash-rich balance sheet and growing North American gross bookings may limit the downside in 2016, but the company's already bracing investors for a loss in the year ahead as it invests in customer acquisition campaigns and tries to push higher-margin merchandise through Groupon Goods.
Prospects for 2016
All three stocks have a good shot of beating the market in 2016. SodaStream has new products in the works, and it's a juicy takeover target. Twitter is shaking things up, growing quickly, and this could be a golden chance to buy in for less than 2013's IPO buyers. Groupon's bountiful greenbacks give it both a cushion to see this rough patch through and the opportunity to buy its way back to growth.
Yes, I also felt they had the right ingredients to move higher in 2015. I was wrong, but 2016 is a brand new year.
