The tech-heavy Nasdaq Composite has been surging to new highs while the rest of the market, well, sort of just jogs in place. This is a consequence of the fact that buyers are focusing in on an increasingly narrow group of big-cap tech stocks to drive the gains, a classic momentum move.
Yet things are not so great for all the stocks left behind. In fact, an increasing number of stocks are sinking to new 52-week lows. On Monday, according to SentimenTrader, they accounted for more than 2% of the stocks on the Nasdaq exchange … which, on a day when the Nasdaq hit a record, is abnormal.
The last time this happened was in July 2015, which marked a medium-term top for stocks ahead of the rise of concerns about energy sector defaults and Chinese currency volatility — both of which pushed the Nasdaq lower with the rest of the market.
While this is no guarantee of broad market weakness on the horizon, it’s certainly a reason for pause. As you deliberate your personal holdings, consider these four popular stocks that are hitting fresh 52-week lows:
Popular Stocks at 52-Week Lows: Occidental Petroleum (OXY)
Occidental Petroleum Corporation (NYSE:OXY) shares are in a steady decline, returning to their early 2016 lows after breaking below the November and March lows. Energy prices are suffering ongoing pressure as oversupply concerns return and faith in last year’s OPEC production freeze agreement fades.
While some of the energy majors reports solid Q1 earnings, a ramp up in U.S. shale production and a drop in crude prices back below the $50-per-barrel threshold is hitting smaller outfits like OXY.
The company will next report results on May 4 before the bell. Analysts are looking for earnings of 8 cents per share on revenues of $2.96 billion. Not even an upgrade from Bank of America Merrill Lynch on March 15 has been able to reverse the persistent decline resulting in a 20%-plus drop from its September high.
Popular Stocks at 52-Week Lows: General Mills (GIS)
They say all good things eventually must come to an end. That’s exactly what’s happening with consumer staples icon General Mills, Inc. (NYSE:GIS) as it falls to fresh lows and violates a long, persistent uptrend that started back in early 2009. That’s the last time the stock touched its 200-week moving average, which currently stands near the $54-a-share level — a mere 3.3% below the current price.
Investors are bailing as food prices continue to decline (driven, in part, by pressure on grain prices) and traditional packaged foods companies are being squeezed by a consumer shift to fresher, local alternatives as well as online options. UBS, in a recent note, outlined their thoughts on increasing price competition in the U.S. grocer space.
The company will next report results on June 29 before the bell. Analysts are looking for earnings of 72 cents per share on revenues of $3.79 billion.
Popular Stocks at 52-Week Lows: Kellogg (K)
Kellogg Company (NYSE:K), like GIS above, is getting slammed hard in trading on Tuesday dropping out of a multimonth trading range going all the way back to December. This range had represented a reprieve from a 10% decline from its mid-2016 high as all the fundamental headwinds hitting GIS — and the packaged foods industry in general — weigh on K as well.
The company will next report results on May 4 before the bell. Analysts are looking for earnings of $1 per share on revenues of $3.28 billion.
Shares enjoyed a short-lived bounce back in February on better-than-expected results. But the 1.4% year-over-year decline in revenue nagged, resulting in renewed selling pressure.
Popular Stocks at 52-Week Lows: Bed Bath & Beyond (BBBY)
Bed Bath & Beyond Inc. (NASDAQ:BBBY) shares — hit by ongoing evidence of tepid consumer spending despite confidence expressed in survey-based measures — is breaking down out of a seven-month consolidation range.
The company reported positive comp-store sales in the prior quarter, but forward earnings guidance disappointed. Intense competitive pressure continues to weigh on profitability, which led Wedbush analysts to lower their price target on April 6.
The company will next report results on June 21 after the close. Analysts are looking for earnings of 66 cents per share on revenues of $2.8 billion.
Anthony Mirhaydari is founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. A two-week and four-week free trial offer has been extended to Investorplace readers. Redeem by clicking the links above.
