In this article, we will look at the 10 worst-performing S&P 500 stocks in 2022. If you want to explore similar stocks, you can also take a look at 5 Worst-Performing S&P 500 Stocks in 2022.
Veteran Investor Sees S&P 500 Falling 26%
British investor and co-founder of Boston-based GMO, Jeremy Grantham, forecasts the S&P 500 losing 26% over the next twelve months, as reported by Reuters on September 8. Mr. Grantham sees the S&P 500 dropping to 3,000 points over the next twelve months, down more than 20% from its current value of roughly 3,850 as of September 16. Mr. Grantham also revealed that he shorting high-yield bonds and the tech-heavy Nasdaq index in anticipation of a “Super Bubble” bursting in the foreseeable future, which according to the veteran investor, has entered its final stage.
As of September 16, the S&P 500 has declined 20% year to date, the Nasdaq Composite index has lost 28% of its value since the beginning of 2022, and the Dow has dipped 16% year to date. Ahead of the next FOMC meeting, scheduled on September 20 and September 21, Wall Street is anticipating another aggressive rate hike from a hawkish Fed. Investors are steering away from high-growth companies since those are the ones that have been hit the hardest. Some of the worst-performing S&P 500 Stocks in 2022 include Netflix, Inc. (NASDAQ:NFLX), Meta Platforms, Inc. (NASDAQ:FB), and NVIDIA Corporation (NASDAQ:NVDA).
Photo by Roberto Júnior on Unsplash
Our Methodology
To devise this list of the 10 worst-performing S&P 500 Stocks in 2022, we reviewed stocks that make up the S&P 500. We looked at their year-to-date performance as of September 16 and selected companies that had some of the biggest year-to-date declines.
10 Worst-Performing S&P 500 Stocks in 2022
10. Etsy, Inc. (NASDAQ:ETSY)
Year to Date Return as of September 16: -48.64%
Number of Hedge Fund Holders: 29
Etsy, Inc. (NASDAQ:ETSY) is an e-commerce company that operates two-sided marketplaces to connect buyers and sellers. The company’s marketplace primarily features handmade vintage items, which include jewelry, ornaments, and art among other decorative items. As of September 16, Etsy, Inc. (NASDAQ:ETSY) has lost 48.64% of its value year to date.
On July 27, Etsy, Inc. (NASDAQ:ETSY) reported earnings for the fiscal second quarter of 2022. The company reported earnings per share of $0.94 and beat estimates by $0.24. The company’s revenue for the quarter amounted to $585 million, up 10.6% year over year, and beat estimates by $28 million.
Though Etsy, Inc. (NASDAQ:ETSY) is among the worst performers of the S&P 500, Wall Street sees upside to the stock. On August 16, Truist analyst Naved Khan raised his price target on Etsy, Inc. (NASDAQ:ETSY) to $130 from $115 and reiterated a Buy rating on the shares. Upon meeting with the company’s leadership, Khan is constructive on Etsy’s (NASDAQ:ETSY) medium and long-term growth story.
At the end of Q2 2022, 29 hedge funds were long Etsy, Inc. (NASDAQ:ETSY) and held stakes worth $595.8 million in the company. This is compared to 43 positions in the previous quarter with stakes worth $668.5 million.
As of June 30, Two Sigma Advisors owns roughly 1.55 million shares of Etsy, Inc. (NASDAQ:ETSY) and is the largest shareholder in the company.
Here is what Oakmark Funds had to say about Etsy, Inc. (NASDAQ:ETSY) in its second-quarter 2022 investor letter:
“We became interested in Etsy (NASDAQ:ETSY) when Josh Silverman took over as CEO in 2017. The company had long been recognized as a great marketplace, but prior management was not focused on maximizing shareholder value. In short order, Silverman transformed Etsy from a borderline non-profit into a higher-margin, faster-growing enterprise. The pandemic helped accelerate already strong fundamental business results as millions of new customers were introduced to the platform while stuck at home. But like so many other Covid-19 “winners,” Etsy has since fallen deeply out of favor with investors, which prompted us to take a closer look. Following a 75% decline in its stock price, the company now trades for 3.5x next year’s revenue or just a low double-digit multiple of operating profit using our estimate of normalized margins. We believe this is an attractive price to pay for a unique digital marketplace with a long runway for future growth. Note that our exposure to Etsy is currently established via options.”
9. Teradyne, Inc. (NYSE:TER)
Year to Date Return as of September 16: -50.78%
Number of Hedge Fund Holders: 30
Teradyne, Inc. (NYSE:TER) is a leading global semiconductor company that develops and manufactures automatic test equipment. At the end of Q2 2022, 30 hedge funds disclosed ownership of stakes in Teradyne, Inc. (NYSE:TER). The total value of these stakes amounted to $617.5 million, down from $993 million in the preceding quarter with 33 positions. The hedge fund sentiment for the stock is negative.
Wall Street is bearish on Teradyne, Inc. (NYSE:TER) and sees a slowing economy and a deteriorating consumer market affecting the stock. On July 28, Northland analyst Gus Richard trimmed his price target on Teradyne, Inc. (NYSE:TER) to $85 from $90 and maintained a Market Perform rating on the shares. The analyst noted that the company is faced with weakening demand for smartphones and PCs. This July, Craig-Hallum analyst Christian Schwab slashed his price target on Teradyne, Inc. (NYSE:TER) to $96 from $138 and downgraded the stock to Hold from Buy.
As of September 16, Teradyne, Inc. (NYSE:TER) has fallen 50.78% since the beginning of 2022.
As of June 30, Alkeon Capital Management is the top shareholder in Teradyne, Inc. (NYSE:TER) with stakes worth $264 million in the company.
Investment management firm, Carillon Tower Advisers, mentioned Teradyne, Inc. (NYSE:TER) in its first-quarter 2022 investor letter. Here is what the firm said:
“Semiconductor test equipment and industrial robot producer Teradyne (NASDAQ:TER) fell after offering lower than expected revenue guidance due to fewer orders from its largest customer. Semiconductor equipment companies as a group underperformed as investors feared a general slowdown in semiconductor demand if the global economy slows.”
8. Paypal Holdings, Inc. (NASDAQ:PYPL)
Year to Date Return as of September 16: -51.83%
Number of Hedge Fund Holders: 97
On August 2, Paypal Holdings, Inc. (NASDAQ:PYPL) announced earnings for the fiscal second quarter of 2022. The company reported a revenue of $6.8 billion and outperformed Wall Street estimates by $21.5 million. The company reported earnings per share of $0.93 and beat expectations by $0.06. Regardless of reporting a strong quarter, shares of Paypal Holdings, Inc. (NASDAQ:PYPL) have tumbled 51.83% year to date, as of September 16.
On August 31, BofA analyst Jason Kupferberg raised his price target on PayPal Holdings, Inc. (NASDAQ:PYPL) to $114 from $94 and upgraded the stock to Buy from Neutral. On September 14, Raymond James analyst John Davis upgraded PayPal Holdings, Inc. (NASDAQ:PYPL) to Outperform from Market Perform and reiterated his $123 price target.
At the close of Q2 2022, 97 hedge funds held stakes in Paypal Holdings, Inc. (NASDAQ:PYPL) worth $5.19 billion. This is compared to 100 hedge funds in the previous quarter with stakes worth $6.21 billion. The hedge fund sentiment for the stock is negative.
As of June 30, Fisher Asset Management owns more than 17.3 million shares of Paypal Holdings, Inc. (NASDAQ:PYPL) and is the top investor in the company. The investment covers 0.85% of Ken Fisher’s 13F portfolio.
Here is what Mayar Capital had to say about Paypal Holdings, Inc. (NASDAQ:PYPL) in its second-quarter 2022 investor letter:
“This quarter, we bought shares in PayPal (NASDAQ:PYPL), the payments platform. PayPal has been one of the more high-profile victims of the market’s brutal ruthlessness over the past few months, and the stock fell by over two thirds between its peak in July to the beginning of March this year. As we progressed PayPal through the Mayar Checklist Process, we identified a business with a leadership position in a structurally growing market.
The company benefits from certain network effects, and faces several competitive threats at the same time. As the business profited from the move to online retail during the pandemic, as well as from the stimulus cheques handed out in the US, the stock price soared to absurd levels. As so often happens, however, the market had overcorrected by February and this quarter was offering prospective shareholders prices that assumed essentially zero growth in the business. When life gives you irrational sellers, make lemonade!”
7. Caesars Entertainment Inc. (NASDAQ:CZR)
Year to Date Return as of September 16: -52.15%
Number of Hedge Fund Holders: 59
Caesars Entertainment Inc. (NASDAQ:CZR) is an American gaming and hospitality company that operates a chain of hotels and casinos across the United States. As of June 30, HG Vora Capital Management owns 5 million shares of Caesars Entertainment Inc. (NASDAQ:CZR) and is the most prominent shareholder in the company.
On August 3, Cowen analyst Lance Vitanza slashed his price target on Caesars Entertainment Inc. (NASDAQ:CZR) to $87 from $105 but maintained an Outperform rating on the shares. This August, B. Riley analyst David Bain reiterated his Buy rating on Caesars Entertainment Inc. (NASDAQ:CZR) but cut his price target on the stock to $102 from $128. The analyst said that the stock is “woefully undervalued”.
At the close of the second quarter of 2022, 59 hedge funds were eager on Caesars Entertainment Inc. (NASDAQ:CZR) and held stakes worth $928.5 million in the company. This is compared to 73 positions in the previous quarter with stakes worth $1.53 billion.
Like Netflix, Inc. (NASDAQ:NFLX), Meta Platforms, Inc. (NASDAQ:FB), and NVIDIA Corporation (NASDAQ:NVDA), Caesars Entertainment Inc. (NASDAQ:CZR) is taking a beating in 2022 and has lost 52.15% of its value year to date.
6. Stanley Black & Decker, Inc. (NYSE:SWK)
Year to Date Return as of September 16: -53.99%
Number of Hedge Fund Holders: 32
Stanley Black & Decker, Inc. (NYSE:SWK) is a leading manufacturer of industrial tools and household hardware. The company operates in the United States, Canada, Europe, and Asia. Wall Street is bearish on the company. On August 17, Deutsche Bank analyst Nicole DeBlase slashed her price target on Stanley Black & Decker, Inc. (NYSE:SWK) to $111 from $126 and downgraded the stock to Hold from Buy.
On July 28, Stanley Black & Decker, Inc. (NYSE:SWK) reported earnings for the second quarter of fiscal 2022. The company reported earnings per share of $1.77 and fell short of Wall Street expectations by $0.36. The company’s revenue for the quarter amounted to $4.39 billion and missed estimates by $349 million. As of September 16, the stock has tumbled 53.99% since the beginning of the year.
At the close of Q2 2022, 32 hedge funds were long Stanley Black & Decker, Inc. (NYSE:SWK) and held stakes worth $496.9 million in the company. This is compared to 38 positions in the previous quarter with stakes worth $922 million.
As of June 30, Greenhaven Associates is the leading investor in Stanley Black & Decker, Inc. (NYSE:SWK) and owns roughly 1.3 million shares of the company.
Some of the worst-performing S&P 500 stocks in 2022 include Stanley Black & Decker, Inc. (NYSE:SWK), Netflix, Inc. (NASDAQ:NFLX), Meta Platforms, Inc. (NASDAQ:FB), and NVIDIA Corporation (NASDAQ:NVDA), all of which have lost more than 50% of their value year to date, as of September 16.
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Disclosure. None. 10 Worst-Performing S&P 500 Stocks in 2022 is originally published on Insider Monkey.
