Every March since 2009, Wall Street revisits the anniversary of the now-seven-year-old bull market and celebrates some of the market’s biggest winners of the huge rally. But with the S&P 500 stumbling out of the starting gate so far in 2016, here’s a look at three of the worst-performing big-name stocks since March 9, 2009: First Solar (FSLR), BlackBerry (BBRY) and Transocean (RIG).
BlackBerry, Transocean, and First Solar each tell an important part of the story about what else happened in the U.S. economy since 2009…and some of it ain’t so good.
In fact, considering the 170% return of the S&P 500 in the last seven years, these stocks have been downright awful.
First Solar (FSLR)
FSLR Stock 7-year Return: -37%
Back in 2009, investors saw solar energy as one of a number of alternative energy sources that was going to assist in the long-term transition of energy away from fossil fuels. Now, seven years later, clean energy is still an idealistic goal of most health- and environmentally-conscious Americans. However, several major changes have happened that have hurt FSLR.
Back in 2009, FSLR was the dominant player in the solar space, providing the cheapest panels and the highest efficiency. However, since that time, a flood of competition producing cheaper and more efficient panels, has crashed into the solar market.
In addition, the recent slump in oil and other fossil fuel prices has relieved much of the economic pressure behind a transition to clean energy. Companies feel a lot less pressure to convert to solar when coal, oil and natural gas energy is so cheap.
As a result, FSLR’s stock is now down 37% percent over the past seven years.
BlackBerry (BBRY)
BBRY Stock 7-year Return: -79%
As recently as 2010, about 40% of all smartphone users had a BlackBerry device. As of Q2 2015, BBRY’s market share was down to about 0.3%.
BBRY devices originally gained popularity because of their security and user-friendly operating systems. However, as Apple (AAPL) and Google (GOOG, GOOGL) continued to innovate, BBRY lost both its competitive edge and its reputation for top-tier devices. Even a name change from “Research In Motion” to “BlackBerry” couldn’t turn around the company (or the stock’s) fate.
Shareholders that have stuck with the stock over the last seven years have watched helplessly as the BBRY stock price fell 79%, while shares of GOOGL and AAPL surged 398% and 750%, respectively.
Transocean (RIG)
RIG Stock 7-year Return: -81%
As much as low oil prices have hurt First Solar, they have nearly crippled RIG. Long before oil prices collapsed in 2014, RIG was already losing its leading market share to companies with much newer and higher-specification rigs, such as Seadrill (SDRL) and Ocean Rig (ORIG) . As of mid-2014, when oil prices first began to collapse, RIG’s average age of its floating fleet was nearly 23 years, while the average age of the fleet of the competitors mentioned above was less than six years.
Of course, the largest part of the downturn in RIG’s stock price has happened since the bottom fell out of the oil market. RIG’s customers, including oil majors, are trimming every ounce of fat off of their capex in an attempt to weather the downturn. Only the lowest-cost and most-efficient projects have maintained their funding, which means the cash has nearly dried up for offshore drillers. Things have gotten so bad lately that just this week, Barclay’s analyst David Anderson said that it has come down to “a game of survival” for the remaining offshore drillers.
In the past seven years, RIG shareholders haven’t enjoyed a bit of the bull market. Instead, the stock is down 81%.
It all goes to show that while a red-hot bull market can help the average investor enjoy some amazing returns, a rising tide doesn’t necessarily lift all boats. You’ve still gotta build your portfolio wisely, and pay attention to shifts in macro trends and consumer behavior.
As of this writing, Wayne Duggan had no positions in any of the stocks mentioned.
