In this piece, we will take a look at the 15 worst performing blue chip stocks in 2023. If you want to skip a background of what’s been going on in this lucrative sector this year, then head on over to 5 Worst Performing Blue Chip Stocks in 2023.
In traditional poker, a blue chip had the highest monetary value and this fact has continued into the stock market as well. Highly valuable and well established firms are often called blue chips, and the term has been used on the market for more than a century now. These firms often earn billions of dollars in revenue, have thousands of employees, and have a global presence that spans several countries.
These factors lend the blue chip sector a semblance of stability that can be quite attractive, especially during a period of economic uncertainty. The most widely accepted classification of blue chip stocks comes through the Dow 30 index, which is fitting since it was a Dow news service reporter that originally coined the term in the 1920s. However, if you had invested your money in the Dow 30 this year, the returns would be rather lackluster. On average, the 30 companies in the list have returned 6.49% this year, which is quite low when we take a look at the high performing and technology stock heavy NASDAQ 100 index which is up 38.35% year to date as of mid August, with the returns tapering off of the 45% that the index had returned during the first half of this year.
Out of the 30 stocks in the index, 11 have returned more than 10% this year while 12 are in the red. The best performing blue chip stock this year in Dow 30 has been Salesforce, Inc. (NYSE:CRM). Salesforce is an enterprise technology software and services provider whose share price is sensitive to changes in the U.S. economy and the ability of the corporate sector to spend. Naturally, its shares had bottomed out from the $254 price at the start of 2022 to $129 by the third week of December as the Federal Reserve aggressively raised interest rates and squeezed the budgets of companies at a time when multiple economists and analysts were also predicting a recession in the U.S. economy.
August is also earnings season in the stock market, with the earnings reports for the second quarter as well as forward guidance for the full year expected to set the tone for what’s to come as investors wonder whether the Federal Reserve has reached the peak of its interest rate hiking cycle. We’ve covered some blue chip earnings in 12 Undervalued Blue Chip Stocks To Buy According to Analysts, including Apple Inc. (NASDAQ:AAPL) whose EPS beat analyst estimates despite a quarterly revenue drop during a time that is typically a slow period for Apple as it ramps up new products for a September launch. Another blue chip firm that reported earnings is The Coca-Cola Company (NYSE:KO), which now expects to grow its 2023 revenues annually by as much as 9% in an upgrade that spelled positive news for the economy ahead.
However, not all is well in the blue chip world. One firm that is quite troubled these days is The Walt Disney Company (NYSE:DIS). Disney made headlines earlier this year when its former chief Bob Iger surprisingly returned to take charge, and recent reports suggest that Mr. Iger might be pulling off a mini Steve Jobs at one of the biggest companies in the world. Apple’s legendary co-founder mercilessly slashed out unprofitable products when the firm was struggling in the late 1990s, and Mr. Iger believes that Disney’s television stations and channels might not be central to the company’s operations.
This was also on Mr. Iger’s mind at Disney’s latest earnings call, where the executive shared that his company is exploring partnerships for the channel. According to him:
Taking our ESPN flagship channels direct-to-consumer is not a matter of if but when. And the team is hard at work looking at all components of this decision, including pricing and timing. It’s interesting to note that ratings continue to increase on ESPN’s main linear channel even as cord cutting has accelerated. This rating strength creates tremendous advertising potential across the board. Our total domestic sports advertising revenue for linear and addressable is up 10% versus the prior year adjusted for comparability, which speaks to the fact that the sports business stands tall and remains a good value proposition. We believe in the power of sports and the unique ability to convene and engage audiences.
Yesterday, it was announced that ESPN has entered into an exclusive licensing arrangement with PENN Entertainment to further extend the ESPN brand into the growing sports betting marketplace. This licensing deal will offer a compelling new experience for sports fans that will enhance consumer engagement. We’re excited to offer this to the many fans who have long been asking for it. Overall, we’re considering potential strategic partnerships for ESPN, looking at distribution, technology, marketing and content opportunities where we retain control of ESPN. We’ve received notable interest from many different entities, and we look forward to sharing more details at a later date when we’re further along in this process.
With these details in mind, let’s take a look at some of the worst performing blue chip stocks this year, with the bottom of the barrel stocks being Verizon Communications Inc. (NYSE:VZ), Walgreens Boots Alliance, Inc. (NASDAQ:WBA), and 3M Company (NYSE:MMM).
Photo by Adam Nowakowski on Unsplash
Our Methodology
To compile our list of the worst performing blue chip stocks in 2023, we calculated the year to date share price returns of the 30 companies on the Dow 30 index. They were ranked according to these returns, and the worst performing blue chip stocks in 2023 are as follows.
Worst Performing Blue Chip Stocks in 2023
15. International Business Machines Corporation (NYSE:IBM)
Year to Date Share Price Returns: 1.11%
International Business Machines Corporation (NYSE:IBM) is one of the oldest computing companies in the world. Taking stock of the current artificial intelligence wave, the firm announced in August that it will integrate Meta Platforms’ AI platform into the WatsonX platform.
49 of the 943 hedge funds part of Insider Monkey’s Q1 2023 database had held a stake in International Business Machines Corporation (NYSE:IBM). Out of these, the firm’s largest shareholder is Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital through a $673 million stake.
International Business Machines Corporation (NYSE:IBM) joins Walgreens Boots Alliance, Inc. (NASDAQ:WBA), Verizon Communications Inc. (NYSE:VZ), and 3M Company (NYSE:MMM) in our list of the worst performing blue chip stocks in 2023.
14. Amgen Inc. (NASDAQ:AMGN)
Year to Date Share Price Returns: 0.33%
Amgen Inc. (NASDAQ:AMGN) is a pharmaceutical company that sells medicines for a variety of ailments, including those of the heart, cancer, and the liver. The firm beat its second quarter earnings EPS analyst estimates by a 51 cent margin, and the shares are rated Buy on average.
By the end of March 2023, 57 of the 943 hedge funds profiled by Insider Monkey had held a stake in the firm. John Overdeck and David Siegel’s Two Sigma Advisors is Amgen Inc. (NASDAQ:AMGN)’s biggest investor courtesy of a $404 million investment.
13. The Walt Disney Company (NYSE:DIS)
Year to Date Share Price Returns: 0.06%
The Walt Disney Company (NYSE:DIS) is an entertainment firm with a global presence. These days, it is looking to focus on its streaming platform and film studios and place other business areas, such as television stations, on the back burner.
During this year’s first quarter, 95 of the 943 hedge funds polled by Insider Monkey had bought The Walt Disney Company (NYSE:DIS)’s shares. The firm’s largest hedge fund shareholder is Nelson Peltz’s Trian Partners since it owns 5.9 million shares that are worth $592 million.
12. The Goldman Sachs Group, Inc. (NYSE:GS)
Year to Date Share Price Returns: -1.59%
The Goldman Sachs Group, Inc. (NYSE:GS) is a global investment bank that serves the needs of businesses, individuals, and governments. There seems to be internal strife at the bank lately, making things difficult for its CEO Mr. David Solomon.
As 2023’s March quarter ended, 69 of the 943 hedge funds part of Insider Monkey’s research had invested in the company. The Goldman Sachs Group, Inc. (NYSE:GS)’s biggest stakeholder out of these is Ken Fisher’s Fisher Asset Management with a $1.6 billion stake.
11. UnitedHealth Group Incorporated (NYSE:UNH)
Year to Date Share Price Returns: -2.05%
UnitedHealth Group Incorporated (NYSE:UNH) is one of the biggest healthcare plan providers in the U.S. It is one of the few stocks on our list that is rated Strong Buy on average and the average share price target is $523.
Insider Monkey took a look at 943 hedge fund portfolios for their Q1 2023 investments and discovered that 116 had held a stake in UnitedHealth Group Incorporated (NYSE:UNH). Rajiv Jain’s GQG Partners is the firm’s largest investor since it owns $2.2 billion worth of shares.
10. Johnson & Johnson (NYSE:JNJ)
Year to Date Share Price Returns: -2.44%
Johnson & Johnson (NYSE:JNJ) is a global healthcare and wellness products provider. The firm is one of the few whose debt is rated AAA, and it beat Q2 analyst EPS estimates as well even as some other large pharmaceutical firms suffered.
After sifting through 943 hedge funds for their first quarter of 2023 shareholdings, Insider Monkey discovered that 86 had invested in the company. Johnson & Johnson (NYSE:JNJ)’s biggest hedge fund shareholder is Ken Fisher’s Fisher Asset Management since owns a stake worth $967 million.
9. The Coca-Cola Company (NYSE:KO)
Year to Date Share Price Returns: -2.83%
The Coca-Cola Company (NYSE:KO) is a multinational beverage firm with a sizeable presence in numerous countries. The firm’s second quarter earnings results showed that consumers remained resilient, and The Coca-Cola Company (NYSE:KO) also increased its 2023 revenue guidance.
During March 2023, 61 out of the 943 hedge funds part of Insider Monkey’s database had owned a stake in The Coca-Cola Company (NYSE:KO). None other than Warren Buffett’s Berkshire Hathaway is the largest stakeholder among these, through its $24.8 billion investment.
8. Merck & Co., Inc. (NYSE:MRK)
Year to Date Share Price Returns: -3.33%
Merck & Co., Inc. (NYSE:MRK) is a pharmaceutical firm headquartered in Rahway, New Jersey. It’s another pharma company that beat Q2 2023 analyst EPS estimates and the stock is rated Buy on average.
Insider Monkey dug through 943 hedge fund portfolios for 2023’s first quarter and discovered that 75 had bought the firm’s shares. Merck & Co., Inc. (NYSE:MRK)’s largest shareholder in our database is Ken Fisher’s Fisher Asset Management since it owns 12.3 million shares that are worth $1.3 billion.
7. Chevron Corporation (NYSE:CVX)
Year to Date Share Price Returns: -5.66%
Chevron Corporation (NYSE:CVX) is a global oil giant that’s been facing a difficult time in the earnings segment lately as the firm comes down from a 2022 high in the wake of record oil prices.
64 of the 943 hedge funds part of Insider Monkey’s database had invested in Chevron Corporation (NYSE:CVX) during this year’s March quarter. Out of these, the biggest investor is Warren Buffett’s Berkshire Hathaway with a $21.6 billion stake.
6. NIKE, Inc. (NYSE:NKE)
Year to Date Share Price Returns: -8.98%
NIKE, Inc. (NYSE:NKE) is a global apparel company that is one of the most valuable firms and brands of its kind. The stock is rated Buy on average, and its financial performance depends on the spending in, and the state of, the economy.
During Q1 2023, 81 of the 943 hedge funds profiled by Insider Monkey had held a stake in the company. NIKE, Inc. (NYSE:NKE)’s largest hedge fund shareholder is Ken Fisher’s Fisher Asset Management since it owns $1.1 billion worth of shares.
Verizon Communications Inc. (NYSE:VZ), NIKE, Inc. (NYSE:NKE), Walgreens Boots Alliance, Inc. (NASDAQ:WBA), and 3M Company (NYSE:MMM) are some of the worst performing blue chip stocks this year.
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Disclosure: None. 15 Worst Performing Blue Chip Stocks in 2023 is originally published on Insider Monkey.