This year has been a rough one for the stock market. In fact, the first few weeks were so bad that they actually marked the worst losing streak to begin a year in the history of the stock market.
Although markets tamed some of those early losses, it was still a horrible January, and entering Friday, the S&P 500 was down 8%, the Dow 30 was off 7%, and the NASDAQ was down 13% on the year.
Such a profound stumble caused many investors to adopt a negative outlook as we march further into 2016. “As goes January, so goes the year,” is the idea.
While many stocks have been beaten down merely due to the increasingly negative investor sentiment, a small few have actually suffered real speedbumps this year that could threaten performance for months or years to come.
Here’s a look at 10 companies that have stumbled out of the gate in 2016 — and may have a tough time getting back up.
10 Companies That Have Fallen on Their Face in 2016: American Express (AXP)
2016 Performance: -24%
A prestigious, 166-year-old company, American Express (AXP) is one of the great American institutions. Known for its elite member benefits, AXP stock is one of Warren Buffett’s largest holdings, so it has to be good.
But 2016 actually hasn’t been so kind to American Express; shares are down more than 20% year-to-date as investors try to come to grips with the fact that the next few years won’t be so peachy for the company.
The elephant in the room is the 16-year exclusive partnership with Costco (COST), who during that period would only accept American Express credit cards. That deal will be ending at the end of March 2016, as rival Visa (V) has secured that contract. Considering that a whopping 10% of AmEx credit cards are Costco-branded, this is a huge blow to AXP, and the company has admitted its profits will be hurt for at least two years.
Fidelity Investments also announced in January that it would be severing ties with American Express and Bank of America, adding further pain.
10 Companies That Have Fallen on Their Face in 2016: Apple (AAPL)
2016 Performance: -11%
Apple (AAPL) is at a critical juncture in its corporate history, and 2016 could very well be a defining year for the tech giant. Once one of the hottest tech stocks in the market, the debate now is whether AAPL can grow at all.
Sales of its flagship iPhone were disappointing over the holiday quarter, and shares got pounded after fiscal Q1 results. Talk of production cuts and reports that Apple has told suppliers to expect fewer orders than previously forecast indicate the smartphone market is rapidly maturing.
With its Apple TV service delayed, the Apple Watch not yet materially contributing to results, and weakening demand in China for its products, this may be the most difficult time to see a catalyst for AAPL stock than at any point in the last 10 years.
10 Companies That Have Fallen on Their Face in 2016: Gilead (GILD)
2016 Performance: -15%
Sure, 2016 is young, but biotech giant Gilead Sciences (GILD) has already seen its fair share of setbacks. For beginners, its heralded CEO John Martin, who has helmed the company for the last 20 years, announced he was stepping down in late January.
It’s understandable why investors are loathe to see him go: GILD stock is up more than 7,500% in the last two decades. In other words, $1,000 invested in Gilead stock 20 years ago would be worth more than $76,000 today.
But a potentially bigger issue at hand is the arrival of a new competitor on the market. Merck (MRK) just received Food & Drug Administration approval for a hepatitis C treatment that will compete with Gilead’s cash cow, Sovaldi. Priced 30% below Sovaldi, investors expect Zepatier, the once-a-day tablet, to eat away at GILD’s market share in the extremely lucrative area.
10 Companies That Have Fallen on Their Face in 2016: Chipotle (CMG)
2016 Performance: -6%
Okay, okay, Chipotle (CMG) sort of fell on its face in 2015. And although the stock price took its biggest beating at the tail end of last year, don’t be fooled into optimism. Things are still bad.
After outbreaks of E. coli and norovirus at various Chipotle locations across the country, the popular burrito chain is voluntarily shutting its doors at all of its U.S. locations for several hours on Feb. 8. It hopes to address exactly what happened, and what can be done to prevent anything like this from happening ever again.
In the meantime, customers aren’t so sure. Chipotle posted its first-ever year-over-year same-store sales (SSS) decline in December, when SSS plunged 14.6%. The trend has only accelerated in the New Year, and the company said SSS in January were down an incredible 36% from January 2015.
10 Companies That Have Fallen on Their Face in 2016: GoPro (GPRO)
2016 Performance: -40%
Again, as with Chipotle, the argument can be made that GoPro (GPRO) suffered its biggest missteps in 2015. Okay, I buy it. But GoPro had an entire 12 months to wreak havoc in last year, and only one so far in 2016.
After plunging 70% in 2015, GoPro shares have continued to be a falling knife in 2016, shedding 40% in the first month-plus of the year. While the major catalyst has been extremely poor holiday sales figures for its signature action sports cameras, it looks like 2016 will also be challenging, to say the least.
GoPro issued Q1 revenue guidance that so severely missed analyst expectations, I dubbed it the worst forward guidance I had ever seen with my own two eyes. At the midpoint of its range it expects $170 million in first-quarter revenue; Wall Street was expecting close to $300 million.
Then, CEO Nick Woodman announced that the company would no longer be issuing quarterly guidance in future quarters. That’s never a good sign, and it’s troubling Woodman doesn’t seem to be treating GoPro’s stumble seriously.
10 Companies That Have Fallen on Their Face in 2016: eBay (EBAY)
2016 Performance: -21%
Online auction giant eBay (EBAY) has seen better days as well. Last year, it finally split from its successful digital payments platform PayPal (PYPL) after Wall Street repeatedly demanded PayPal be set free from its sluggish parent.
You’d think that eBay would be able to capture some of the incredible growth in e-commerce, but it seems competitors like Amazon.com (AMZN) are stealing all its thunder. In fact, marketplace revenues fell 5% in the fourth quarter — a period in which Amazon saw revenue soar more than 20%.
Given the fact the company is also expecting lower-than-consensus profits for the Q1 and full-year 2016 periods, it’s no wonder shares took a sudden 13% dive after eBay’s first earnings call of the year.
10 Companies That Have Fallen on Their Face in 2016: Twitter (TWTR)
2016 Performance: -34%
Twitter’s (TWTR) saga has, improbably, only gotten sadder in 2016. Twitter is coming off a miserable 2015 in which shares fell 35% and the company shuffled CEOs in an effort to reignite stagnant user growth numbers.
But with golden boy co-founder Jack Dorsey back in charge, the stock has still shed more than 30% through early February, plunging to new all-time lows. The stock got so cheap that buyout rumors briefly started to swirl this week, when The Information reported that private equity powerhouse Silver Lake and famed venture capitalist Marc Andreessen were interested in teaming up to make an offer on Twitter.
Within a day, those rumors were shown to be patently false, and TWTR resumed its slide. With Dorsey pulling double CEO duties, it’s unclear if he’ll have the time that Twitter demands to get back on track.
10 Companies That Have Fallen on Their Face in 2016: Deutsche Bank (DB)
2016 Performance: -36%
Deutsche Bank (DB) is already falling off a cliff in 2016, as Germany’s largest lender faces skepticism from markets over its capitalization levels. Unfortunately, growth in the Eurozone has been downright anemic for years, and now that global growth is slowing too, downside risk is getting harder and harder to diversify away from.
Recently, doubts about whether Deutsche Bank would be able to pay back investors in its contingent convertible bonds, or CoCos, prompted a huge selloff in those securities. Coupon payments are tied to capital levels, and investors believe Deutsche Bank is teetering on the edge of not being able to afford them.
And while the company could issue more stock to assuage those fears, that would dilute current shareholders — and still wouldn’t guarantee an end to the bank’s problems.
10 Companies That Have Fallen on Their Face in 2016: Murphy USA (MUSA)
2016 Performance: -6%
Murphy USA (MUSA), as it turns out, is one of those stocks you don’t realize is risky until it’s too late. The gas retailer got the bad news from Walmart (WMT) on Thursday that the world’s largest brick-and-mortar retailer would be breaking off its partnership with Murphy.
For the past 20 years, Murphy has been an exclusive partner to Walmart, building its locations in the parking lots of new Walmart locations. Both companies benefit: Murphy gets more traffic from those already shopping at Walmart, and Walmart gets more traffic from people filling up on gas. Walmart stores with Murphy gas stations nearby sell 2% more than their Murphy-less counterparts.
Well, from now on, Walmart’s gonna do its own gas stations. That’s a big blow to Murphy; of its 1,300 locations, 1,000 were intentionally built near Walmarts.
10 Companies That Have Fallen on Their Face in 2016: LinkedIn (LNKD)
2016 Performance: -50%
It must be tough for LinkedIn (LNKD) and Twitter to look on in despair as Facebook (FB) stock flirts with new highs. But the fact of the matter is, Facebook is the only publicly traded social media company that continues to crush it quarter after quarter.
In what was probably the most severe high-profile bust this earnings season, LNKD stock plunged 40% immediately after posting Q4 earnings, falling nearly $80 per share in a single day. Shares, with a 52-week high of $276, now trade for around $110.
Interestingly, it wasn’t lackluster fourth-quarter results that wrecked the stock price. It was guidance for the first quarter of 2016, which fell far below analyst estimates on both earnings and revenue, that got investors in a huff.
As of this writing, John Divine was long PYPL and AMZN stock. You can follow him on Twitter at @divinebizkid or email him at firstname.lastname@example.org.