In this article, we discuss the worst performing stocks in the S&P 500 in 2024 along with the current investment environment and expert opinion around it.
Since 2023, the market has experienced extended winning streaks, reflecting the economy’s resilience. The most recent rally stretched six consecutive weeks but finally came to an end between October 21 and 25, marking the first week in six to close with a loss.
Nevertheless, the tech sector still closed with small gains as it was led by Tesla after its strong earnings. Despite that, now some experts in the market are trying to broaden their investments as they see uncertainty in the coming months, mainly due to the election and geopolitical reasons.
READ NEXT: 10 Best-Performing S&P 500 Stocks in the Last 3 Years and 10 Worst Performing Dow Stocks Year-to-Date.
A New Investment Approach Favoring Value Over Tech in Uncertain Times
James Cakmak, Chief Investment Officer at Clockwise Capital, detailed his recent shift from the tech-heavy Mag7 stocks into more diverse, value-focused sectors. Initially long on tech, Cakmak’s strategy changed due to heightened risks related to the election, geopolitical tensions, and economic cycles. While tech had seen significant growth, he felt it was essential to seek other opportunities for “alpha” as the market evolved.
Cakmak explained that Clockwise Capital has moved funds into undervalued sectors, such as automotive and metals, as well as smaller, less mainstream software companies.
Addressing inflation, Cakmak stressed the importance of keeping metals as a hedge. With inflation still showing signs of persistence and the Fed adjusting its rate cut expectations, he sees value in maintaining assets that traditionally perform well during inflationary periods, including gold.
Finally, he highlighted his commitment to semiconductors as a long-term investment theme, acknowledging their volatility but affirming their relevance in driving automation and productivity.
If we talk about other opportunities in the market, Goldman Sachs is bullish on undervalued quality growth stocks and cyclical value stocks as discussed by Christian Mueller-Glissmann from Goldman in a CNBC interview. We talked about it in our article: 12 Most Profitable Growth Stocks To Invest In. Here is an excerpt from it:
“Mueller-Glissmann highlighted two key reasons for not expecting a major market decline: inflation has significantly dropped, giving central banks more flexibility, and price momentum over the past 6-12 months suggests a strong macroeconomic backdrop. With the labor market improving, he sees no signs of an economic downturn.
His strategy focuses on quality growth stocks that are temporarily undervalued and cyclical value stocks that could recover as the market stabilizes.”
With that, we look at the 10 Worst Performing Stocks in S&P 500 in 2024.
10 Worst Performing Stocks in S&P 500 in 2024
Our Methodology
For this article, we checked the performance of the S&P 500 stocks and picked out the 10 stocks with the highest share price decline, as of October 24. The stocks are listed in descending order of their share price performance. We also added the hedge fund sentiment around each stock which was taken from Insider Monkey’s Q2 database of 912 elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Worst Performing Stocks in S&P 500 in 2024
10. The Boeing Company (NYSE:BA)
Number of Hedge Fund Holders: 42
Year-to-Date Share Price Performance: -38.35%
The Boeing Company (NYSE:BA) designs, develops, manufactures, and supports a wide range of aerospace products, including commercial jetliners, military aircraft, satellites, and missile defense systems. It operates through three main segments: Commercial Airplanes, Defense, Space, and Global Services.
The company is grappling with several difficulties, including labor strikes, leadership changes, a declining credit rating, and consecutive earnings losses. In the third quarter, Boeing (NYSE:BA) reported a non-GAAP loss of $10.44 per share and its revenue of $17.84 billion was down 1.4% year-over-year and it burnt through a significant amount of cash in the quarter.
Boeing’s (NYSE:BA) woes continue to expand as the members of the International Association of Machinists and Aerospace Workers have rejected the latest improved contract proposal over non-restoration of the company’s pension plan, according to The New York Times.
On October 24, The Fly reported that BofA highlighted that Kelly Ortberg, in his inaugural earnings call as CEO of Boeing (NYSE:BA), aimed to reset expectations and emphasized his commitment to launching a clean-sheet aircraft. The firm views this message as a way to energize Boeing’s workforce and culture and noted that a key step in making Boeing “great again” is to resolve the ongoing strike. However, the union’s rejection of the latest contract proposal adds uncertainty, costs, and delays as the strike nears its 40th day.
9. The Estée Lauder Companies Inc. (NYSE:EL)
Number of Hedge Fund Holders: 47
Year-to-Date Share Price Performance: -39.06%
The Estée Lauder Companies Inc. (NYSE:EL) produces and sells a wide range of skincare, makeup, fragrance, and hair care products globally. Its skincare offerings include moisturizers, serums, cleansers, and suncare items, while makeup products include lipsticks, foundations, and various tools. The fragrance line features eau de parfum sprays and scented lotions, and hair care includes shampoos, conditioners, and styling products.
Estée Lauder (NYSE:EL) released its FY 24 earnings report in August which revealed a challenging landscape despite some growth in the second half of the year. Some factors contributing to overall performance included ongoing weakness in the prestige beauty market in Mainland China, necessary adjustments in Asia travel retail, and heightened competition in North America. As a result, organic net sales dropped 2%, with a 3% decline in the Asia Pacific region.
The decline in Asia travel retail led to a 2% drop in EMEA sales, and net sales in the Americas remained flat year-over-year. Skincare and hair care categories saw declines of 3% and 4%, respectively, while fragrance rose by 2%. Operating income fell 13% to $1.6 billion, with diluted EPS declining 25% to $2.59. The effective tax rate increased to 31%, showing a higher tax burden on foreign earnings.
According to the management, Estée Lauder’s (NYSE:EL) first-quarter results are anticipated to be pressured by ongoing challenges in Mainland China and Asia travel retail, with organic net sales expected to fall between 3% and 5%. Despite the difficulties faced in fiscal 2024, the company aims to leverage its brand strengths and strategic initiatives to cultivate growth moving forward.
8. DexCom, Inc. (NASDAQ:DXCM)
Number of Hedge Fund Holders: 64
Year-to-Date Share Price Performance: -39.19%
DexCom, Inc. (NASDAQ:DXCM) is a medical device company specializing in continuous glucose monitoring (CGM) systems for diabetes management, both in the U.S. and internationally. Its main products include the Dexcom G6 and G7 CGM systems, the Dexcom Share remote monitoring system, and the Dexcom Real-Time API for integrating CGM data into health apps. The company also offers Dexcom ONE, which replaces traditional finger-stick blood glucose testing.
DexCom (NASDAQ:DXCM) faced a major sell-off after it reported Q2 earnings in July as its stock price dropped over 40% between July 25 and 26. In its second-quarter 2024 investor letter, Ithaka Group said that while the company reported a strong quarter that exceeded analyst expectations, the company’s stock price declined likely due to failing to meet high investor expectations after several quarters of significant growth.
Moreover, its earnings report revealed a decline in both customer numbers and revenue per customer. CEO Kevin Sayer explained that the downturn was partly due to a restructuring of the U.S. sales force following the launch of the over-the-counter Stelo device. He also noted an unexpected surge in rebate eligibility for the G7 continuous glucose monitor, which occurred at a rate three times faster than anticipated.
DexCom (NASDAQ:DXCM) reported its Q3 earnings on October 24. It posted an EPS of $0.45, exceeding expectations by $0.02, and its revenue of $994 million showed a slight increase from the previous year and outperformed the estimates by $3.01 million.
Its U.S. revenue saw a 2% decline due to shifting channel dynamics. International markets performed well, especially in Japan and Europe. The company maintained its 2024 revenue guidance of $4 billion to $4.05 billion, with continued focus on improving sales productivity and navigating market challenges.
After the earnings, Canaccord Genuity analyst William Plovanic reiterated a Buy rating on DexCom (NASDAQ:DXCM) stock with a price target of $89. He mentioned strong international sales that outperformed expectations and contributed to overall revenue growth, despite a decline in U.S. revenue. The record new patient starts in Q3 suggest a promising future for recurring revenue. Plovanic views the challenges related to G7 rebates and distribution changes as temporary and manageable, with expected benefits from new patient starts in the near future.
Artisan Partners stated the following regarding DexCom, Inc. (NASDAQ:DXCM) in its Q3 2024 investor letter:
“Among our top detractors were DexCom, Inc. (NASDAQ:DXCM), iRhythm and Celsius. Dexcom is the leader in continuous glucose-monitoring (CGM) systems. With data increasingly supporting the clinical and economic case for CGMs, we believe Dexcom is well positioned to further penetrate the Type 1 diabetes market and to drive adoption in the much larger Type 2 diabetes market. Unfortunately, financial results showed meaningful growth deceleration, and shares responded accordingly. The company pointed to several causes for the surprising slowdown, most of which were execution related (e.g., sales force changes and distribution channel mismanagement) in the context of healthy industry trends. While we continue to believe in the case for CGMs and Dexcom’s technology, the lack of execution is concerning. We believe these operational mistakes will take time to fix, and we reduced our position.”
7. Lululemon Athletica Inc. (NASDAQ:LULU)
Number of Hedge Fund Holders: 45
Year-to-Date Share Price Performance: -40.84%
Lululemon Athletica Inc. (NASDAQ:LULU) is an American-Canadian retailer specializing in premium athletic apparel. It designs, distributes, and retails athletic apparel, footwear, and accessories for both men and women. The brand offers a variety of products, including pants, shorts, tops, and jackets suited for activities like yoga, running, and training, along with fitness-related accessories.
Lululemon (NASDAQ:LULU) saw its first major drop in performance in March after it provided disappointing guidance and reported weak sales in the U.S. in fiscal Q4 2024. The shares of the company’s shares dropped close to 16% in a day. Despite outperforming expectations, the company mentioned that it was facing a challenging retail environment due to cautious consumer spending. Sales growth in the Americas slowed to 9%, down from 29% in the prior year.
Nevertheless, the company’s shares saw a bit of recovery after the latest fiscal 2025 second quarter results as the stock gained over 14.5% between August 29 and October 24. At the latest earnings call, CEO Calvin McDonald highlighted Lululemon’s (NASDAQ:LULU) international growth, reporting a total revenue increase of 7% or 8% in constant currency. Women’s merchandise rose 6%, while men’s grew by 11%. The company’s earnings per share increased by 18% due to strong gross margins.
Moreover, the company aims to quadruple its international revenue by 2026, with significant growth in markets like China, where revenue surged 34%. However, U.S. revenue was flat, attributed to reduced newness in women’s products. The CEO showed confidence in future growth, especially in the U.S. women’s segment, supported by innovative product offerings and effective brand campaigns.
6. Dollar General Corporation (NYSE:DG)
Number of Hedge Fund Holders: 42
Year-to-Date Share Price Performance: -42.04%
Dollar General Corporation (NYSE:DG) operates as a neighborhood general store, offering affordable products and services. As of August 2024, the company has 20,345 locations in the U.S. and Mexico, including various formats like Dollar General, DG Market, DGX, pOpshelf, and Mi Súper Dollar General.
Heartland Advisors discussed Dollar General’s (NYSE:DG) performance decline in its third quarter 2024 investor letter. The firm said that it was the worst performer in the consumer staples sector this quarter, cutting its 2024 earnings guidance and reducing same-store sales and margin expectations. These challenges stem from its core customers’ financial struggles and competition from Walmart’s lower prices.
Management plans to boost promotions but believes no additional investment in staffing is necessary. The firm sold its position for tax losses but will continue monitoring the company’s fundamentals, looking for sales stabilization through promotional activities and improved cash flow management.
Dollar General (NYSE:DG) encountered difficulties in the first half of the year, especially in discretionary areas like seasonal home goods and apparel, with June outperforming July. About 60% of its sales come from households earning under $35,000, leading to low consumer sentiment among this core demographic facing financial pressures from inflation.
For 2024, the company expects ongoing promotional challenges and has lowered its EPS guidance to the range of $5.50 to $6.20. Despite these issues, Dollar General (NYSE:DG) is committed to long-term growth through new store openings and strategic investments and maintains optimism about improving customer loyalty, boosting sales, and delivering shareholder value.
5. Humana Inc. (NYSE:HUM)
Number of Hedge Fund Holders: 71
Year-to-Date Share Price Performance: -45%
Humana Inc. (NYSE:HUM) provides medical and specialty insurance products in the U.S. through two segments: Insurance and CenterWell. It offers medical and supplemental benefit plans, manages the Limited Income Newly Eligible Transition prescription drug plan, and partners with states for Medicaid and long-term support services.
The company also provides commercial health insurance, including dental and vision coverage, along with military services and pharmacy benefit management. It operates pharmacies and primary care centers, as well as home health services.
Humana (NYSE:HUM) started the year in red and was down over 20% by the second quarter. However, it fell significantly after the second quarter despite beating the Wall Street estimates. At the quarter’s earnings call, CEO James Rechtin acknowledged ongoing external challenges but maintained that the company’s fundamentals remain strong.
The company exceeded expectations, yet faced medical cost pressures, especially due to higher-than-expected inpatient admissions. The Medicare segment performed well, with an increased forecast of 75,000 additional members, representing a 4% annual growth. However, rising inpatient costs created significant pressure, which is expected to continue.
Rechtin also noted advancements in managing administrative costs, automation efforts, and partnerships aimed at improving efficiency and consumer experiences. Despite the difficulties, he remains confident in the company’s long-term outlook and reaffirmed guidance for adjusted EPS and benefit ratios for 2024, while expecting continued pressure from high inpatient costs into 2025.
In summary, while there are positive developments, the company faces significant operational challenges.
4. Dollar Tree, Inc. (NASDAQ:DLTR)
Number of Hedge Fund Holders: 38
Year-to-Date Share Price Performance: -53.03%
Dollar Tree, Inc. (NASDAQ:DLTR) operates over 15,000 discount stores under the Dollar Tree, Family Dollar, and Dollar Tree Canada brands. Dollar Tree offers products ranging from $1.25 to $5, while Family Dollar targets lower-income customers with items priced between $1 and $10. The company sells a range of consumables, seasonal items, and general merchandise, including apparel and electronics.
As mentioned by Madison Investments second-quarter 2024 investor letter, Dollar Tree (NASDAQ:DLTR) struggled recently due to several issues, including challenges in the low-income consumer segment, competitive pricing strategies from other retailers, and weak sales at the Dollar Tree brand. Investors reacted cautiously to management’s decision to review the underperforming Family Dollar brand.
Madison added that despite all of it, there is optimism about the long-term potential of the multi-price initiatives at Dollar Tree, and support for management’s efforts to explore options for Family Dollar.
BoFA analyst Robert Ohmes is more bearish on the stock as he said that while the company is promoting value through its multi-price assortment and some successful store transformations aimed at increasing basket size, concerns remain about potential gross margin declines. The multi-price strategy currently contributes only a small share of total sales, and its broader benefits have yet to materialize.
The company is now looking to address its problems as it conducted a comprehensive assessment of its store portfolio to pinpoint locations for closure, relocation, or rebranding, considering market conditions and individual store performance.
Madison Mid Cap Fund stated the following regarding Dollar Tree, Inc. (NASDAQ:DLTR) in its Q3 2024 investor letter:
“The bottom five detractors for the quarter were Dollar Tree, Inc. (NASDAQ:DLTR), MKS Instruments, PACCAR, Copart, and Amphenol. Dollar Tree underperformed following disappointing sales at the core Dollar Tree banner and reduced full year earnings guidance. The company, as well as its closest peers, is facing headwinds from a weak low-end consumer, less ‘trade-down’ benefit from middle-income consumers, and a tough competitive environment. Despite these headwinds, we are encouraged by the long-term prospects of the multi-price initiatives at the Dollar Tree banner, with the latest iteration of updated stores showing a strong up-lift in sales. As management more aggressively rolls out these updates, the impact to the company will be more meaningful, and, we believe, result in much higher earnings power.
The headwinds outlined above impacting Dollar Tree’s business has resulted in the stock trading at depressed levels. Given our confidence in the core strength of the Dollar Tree franchise and its potential long-term earnings power, we added to our holding.”
3. Moderna, Inc. (NASDAQ:MRNA)
Number of Hedge Fund Holders: 39
Year to Date Share Price Performance: -53.07%
Moderna, Inc. (NASDAQ:MRNA) is a significant player in the field of mRNA medicine, having developed innovative treatments and vaccines for various diseases, including infectious diseases, cancer, and rare genetic conditions. Its mRNA platform enabled the rapid creation of Spikevax, one of the earliest COVID-19 vaccines, which has been widely distributed globally.
Its mRNA technology uses the body’s natural protein production system to create tailored treatments by instructing cells to produce specific proteins. This process mimics biological protein creation and offers advantages over traditional medicines.
Moderna’s (NASDAQ:MRNA) stock had an incredible start to the year and was up nearly 50% between the start of the year and May 24. However, the company’s stock started to have a mixed performance afterward due to several reasons. The company experienced a significant drop in its stock price after reducing its revenue outlook during Q2 results, due to decreased demand for its COVID-19 vaccine in Europe and a challenging market in the U.S. Factors contributing to this revision were minimal sales in the European Union for 2024, possible delays in international sales until 2025, and growing competition in the U.S. for respiratory vaccines.
Nevertheless, building on the success of its COVID-19 vaccine, Moderna (NASDAQ:MRNA) is developing a broad pipeline of several programs that span infectious diseases, cancer, autoimmune conditions, and rare diseases. Over the next five years, it aims to launch up to 15 new products, including vaccines for COVID-19, flu, and RSV, along with therapies targeting latent viruses, cancer, and rare diseases.
Moderna’s (NASDAQ:MRNA) recent R&D Day highlighted the strategic prioritization of its mRNA pipeline, with an emphasis on respiratory and non-respiratory vaccines. The company announced that five respiratory vaccines have achieved positive Phase 3 results, with three expected to be submitted for approval in 2024.
The company is also advancing five non-respiratory products in studies across cancer, rare diseases, and latent vaccines, aiming for approvals by 2027. The company’s R&D success rate is notably higher than the industry average, with a combined probability of success in mid and late-stage development at 66%. However, the company plans to reduce its annual R&D spending by about $1.1 billion starting in 2027, as it focuses on its late-stage pipeline, including cancer vaccines and therapies for rare diseases.
Moderna (NASDAQ:MRNA) is shifting focus to oncology and rare disease therapeutics, expecting 2025 revenues between $2.5 and $3.5 billion. It plans to achieve break-even by 2028 with sufficient capital to fund operations without raising new equity as it has $10.8 billion in cash reserves as of Q2 2024.
2. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 75
Year-to-Date Share Price Performance: -53.26%
Intel Corporation (NASDAQ:INTC) is a major player in the tech industry, specializing in the design and production of computer components like microprocessors, chipsets, and networking devices. The company has played a key role in advancing the computing field and serves both consumer and enterprise markets, providing processors to leading tech firms and maintaining a strong foothold in the PC and server sectors.
Intel (NASDAQ:INTC) has made it to almost every one of our worst-performing stocks list over the last few weeks including worst-performing Nasdaq stocks, worst-performing blue chip stocks, and worst-performing tech stocks. Despite making progress in product and process development during the second quarter, the company faced several challenges, including new export restrictions and the faster adoption of AI CPUs, which hurt its profit margins.
Its foundry business underperformed, and PC chip sales declined, which added to its troubles. It is also facing tough competition from Taiwan Semiconductor, and reported significant losses, with a $2.8 billion operating loss in Q2 and a total of $5.3 billion for the first half of the year.
Nevertheless, Intel (NASDAQ:INTC) is taking steps to improve its future performance with a cost reduction plan. The company aims to cut its workforce by 15% by 2025 and reduce operating expenses to $17.5 billion that year, with more cuts anticipated in 2026. Capital expenditures will also decrease, with gross spending for 2024 expected between $25 billion and $27 billion, and net spending between $11 billion and $13 billion. To focus on long-term investments, the company will suspend its dividend to maintain liquidity.
1. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Number of Hedge Fund Holders: 35
Year-to-Date Share Price Performance: -64.95%
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is a multinational holding company that operates major pharmacy chains such as Walgreens in the U.S. and Boots in the U.K. It was formed after Walgreens’ full acquisition of Alliance Boots, after initially purchasing a stake in 2012. The company has since grown to include retail, pharmaceutical manufacturing, and distribution operations in multiple countries. It is a significant player in the pharmacy sector, ranking among the largest U.S. corporations
Walgreens (NASDAQ:WBA) has seen better days but they haven’t occurred over the past few years. While it tops our list of worst-performing stocks of the current year, the company stock price also shows declines of nearly 83% over the last 5 years. Direct-to-consumer competition and operational challenges have significantly impacted the company’s performance over the last few years.
However, CEO Tim Wentworth joined the company in 2023 and is looking to make a turnaround, especially through cost-cutting measures. While the company’s losses widened in FY 2024, some positives gave the stock some breathing room. The company is up nearly 11% over the last 30 days, as of October 24.
In fiscal 2024, the company surpassed its cost-saving targets by achieving $1 billion in savings, reducing capital expenditures by $600 million, and generating $500 million from working capital initiatives. Additionally, it cut net debt by $1.9 billion and lease obligations by $1.2 billion.
Walgreens Boots’ (NASDAQ:WBA) strategy is now focused on being a retail pharmacy-led company, aiming to leverage consumer trust, convenience, and relevance. Plans include closing 1,200 underperforming stores over the next 3 years while investing in 6,000 profitable ones. 500 closures are expected in fiscal 2025, with a focus on underperforming or cash flow negative locations. It is also refreshing its product assortment, with a focus on health and wellness, especially women’s health.
The company aims to generate more free cash flow, reduce net debt, and monetize non-core assets like VillageMD. It is negotiating pharmacy reimbursement contracts to ensure fair pricing. The company will continue focusing on pharmacy margins, retail strategy, and debt reduction in fiscal 2025.
According to TD Cowen, Walgreens Boots (NASDAQ:WBA) adjusted EPS will keep dropping in fiscal year 2026, although the decline will be slower. It expects earnings to start growing again in fiscal year 2027. The firm maintains a Buy rating on the stock but reduced the price target for the stock by $2 to $14.
While we acknowledge the potential of Walgreens Boots Alliance, Inc. (NASDAQ:WBA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than WBA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock
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