These 15 Important Stocks are Losing Value in 2022

Published on June 16, 2022 at 10:00 am by Usman Kabir in Hedge Funds, News

In this article, we discuss the 15 important value stocks that are losing value in 2022. If you want to read about some more stocks that are losing value in 2022, go directly to These 5 Important Stocks are Losing Value in 2022.

Value stocks have provided investors with some much-needed relief from a devastating storm at the stock market where high-growth names, which had become very popular in the last few years, are pummeled amid soaring inflation and aggressive rate hikes. The dumping of high growth names is evident from the performance of the benchmark S&P 500 and the NASDAQ Composite in the past six months. Both indexes, which are growth-heavy, are down 21% and 30% year-to-date respectively. Compared to this, the popular value index, the MSCI World Value Index, has slipped just 7% amid the larger panic. Bloomberg data reveals that an investing strategy based on investments in firms that are cheap relative to their book values and betting against expensive stocks has generated profits of around 30% so far this year.

“A Regime Shift is Underway”

Despite this outperformance, major value names are still losing value as investors move towards gold and other safer bets. Some of the top stocks that are losing value in 2022 include Lowe’s Companies, Inc. (NYSE:LOW), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG). However, analysts do not expect this trend to last. Yoram Lustig, the head of multi-asset solutions for Europe and Latin America at US asset manager T Rowe Price, recently told news publication Financial Times that a “regime shift is underway” at the market, pointing to the durable conditions that are being set for value stocks to outshine their growth counterparts. Rob Arnott, the chief of consultancy Research Affiliates, also echoed these comments, noting that the worst decade for value stocks in history was over and advised investors to cash in on the “fruits of the rebound”.

Photo by Sajad Nori on Unsplash

Our Methodology

Famous stocks that have suffered losses in 2022 and are relatively undervalued were identified. These were then sorted using the Price-to-Earning (PE) ratios and Year-to-Date losses. Stocks that have a PE ratio of less than 25 were preferred for the list. The business fundamentals and analyst ratings of each company are also discussed to provide some additional context. Data from around 900 elite hedge funds tracked by Insider Monkey in the first quarter of 2022 was used to identify the number of hedge funds that hold stakes in each company.

These Important Stocks are Losing Value in 2022

15. Genuine Parts Company (NYSE:GPC)

Number of Hedge Fund Holders: 29

PE Ratio: 20.51

YTD Decline in Share Price as of June 15: 3.50%

Genuine Parts Company (NYSE:GPC) deals in automotive and industrial parts. The company has recently expanded presence in key European markets like Spain and Portugal through the purchase of automotive aftermarket parts distributor Lusan Group. The latter runs over 37 stores across the region and is expected to generate annual revenues of around €115 million for the company. It also runs a national distribution center.

On May 10, Bank of America analyst Elizabeth Suzuki upgraded Genuine Parts Company (NYSE:GPC) stock to Neutral from Underperform with a price target of $133, noting that the valuation of the stock appeared fair and the firm had a long history of dividend growth.

At the end of the first quarter of 2022, 29 hedge funds in the database of Insider Monkey held stakes worth $457 million in Genuine Parts Company (NYSE:GPC), the same as in the preceding quarter worth $632 million.

Just like Lowe’s Companies, Inc. (NYSE:LOW), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG), Genuine Parts Company (NYSE:GPC) is one of the stocks that elite investors are keeping their eye on.

14. Church & Dwight Co., Inc. (NYSE:CHD)

Number of Hedge Fund Holders: 33

PE Ratio: 25.27

YTD Decline in Share Price as of June 15: 19.01%

Church & Dwight Co., Inc. (NYSE:CHD) makes and sells household and personal care products. In late April, the firm posted earnings for the first quarter of 2021, reporting earnings per share of $0.83, beating market estimates by $0.06. The revenue over the period was $1.3 billion, up close to 5% year-on-year and beating estimates by $10 million. However, the firm posted disappointing guidance numbers, noting that cost pressures would limit EPS growth to around 4%. The firm had previously guided to a range of up to 8%.

On March 29, Goldman Sachs analyst Jason English maintained a Neutral rating on Church & Dwight Co., Inc. (NYSE:CHD) stock and lowered the price target to $101 from $105, noting that “inflation will likely be higher and more prolonged through 2022 than previously anticipated”.

Among the hedge funds being tracked by Insider Monkey, London-based investment firm Fundsmith LLP is a leading shareholder in Church & Dwight Co., Inc. (NYSE:CHD) with 8.4 million shares worth more than $838 million.

13. Illinois Tool Works Inc. (NYSE:ITW)

Number of Hedge Fund Holders: 36

PE Ratio: 21.85

YTD Decline in Share Price as of June 15: 23.51%

Illinois Tool Works Inc. (NYSE:ITW) markets industrial products and equipment. The company has an impressive dividend history stretching back over 45 years. In the past 26 years, the dividend payouts have registered consistent growth. The sector median in this regard is just two years, attesting to the reliability of the business model of the firm in a volatile market. On May 6, the firm declared a quarterly dividend of $1.22 per share, in line with previous. The forward yield was 2.34%.

On May 4, investment advisory Credit Suisse maintained an Outperform rating on Illinois Tool Works Inc. (NYSE:ITW) stock and lowered the price target to $261 from $267. Analyst Jamie Cook issued the ratings update.

At the end of the first quarter of 2022, 36 hedge funds in the database of Insider Monkey held stakes worth $425 million in Illinois Tool Works Inc. (NYSE:ITW), compared to 29 the preceding quarter worth $408 million.

12. Stanley Black & Decker, Inc. (NYSE:SWK)

Number of Hedge Fund Holders: 38

PE Ratio: 12.87

YTD Decline in Share Price as of June 15: 42.74%

Stanley Black & Decker, Inc. (NYSE:SWK) markets tools and storage for industrial users. On April 28, the firm posted earnings for the first quarter of 2022, reporting earnings per share of $2.10, beating market estimates by $0.40. The revenue over the period was $4.4 billion, up close to 20% compared to the revenue over the same period last year. The firm is also a reliable dividend player with forward yield of close to 3%.

On April 29, Baird analyst Timothy Wojs maintained an Outperform rating on Stanley Black & Decker, Inc. (NYSE:SWK) stock and lowered the price target to $160 from $188, noting that there was long-term value in the shares as investors focused on better execution.

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Pzena Investment Management is a leading shareholder in Stanley Black & Decker, Inc. (NYSE:SWK) with 1 million shares worth more than $141 million.

Here is what Saturna Capital has to say about Stanley Black & Decker, Inc. (NYSE:SWK) in its Q3 2021 investor letter:

“Stanley Black & Decker, Inc. (NYSE:SWK) performed well through the first part of the year but struggled over the summer. China accounts for much of its production, and their zero-tolerance approach to pandemic safety measures has led to disruption, compounded by shipping difficulties and rising materials expenses. We still believe one outcome of the pandemic will be a buoyant home improvement market, given that one never knows when the next pandemic lockdown may occur.”

11. Emerson Electric Co. (NYSE:EMR)

Number of Hedge Fund Holders: 45

PE Ratio: 17.70

YTD Decline in Share Price as of June 15: 6.50%

Emerson Electric Co. (NYSE:EMR) markets electrical components and equipment. In late May, news platform Bloomberg reported that the company was weighing the possible sale of the garbage disposal unit of the business that is worth close to $3 billion. The unit is understood to be an attractive acquisition target of private equity firms and publicly traded rivals. The unit, named Insinkerator, makes garbage disposal products and instant hot water dispensers.

On May 17, Citi analyst Andrew Kaplowitz maintained a Buy rating on Emerson Electric Co. (NYSE:EMR) stock and lowered the price target to $111 from $119, noting there were several favorable aspects to the Aspen Technology transaction of the firm.

Among the hedge funds being tracked by Insider Monkey, New York-based firm Millennium Management is a leading shareholder in Emerson Electric Co. (NYSE:EMR) with 2.1 million shares worth more than $207 million.

10. Target Corporation (NYSE:TGT)

Number of Hedge Fund Holders: 50

PE Ratio: 12.22

YTD Decline in Share Price as of June 15: 36.43%

Target Corporation (NYSE:TGT) is a general merchandise retailer. On June 9, the company declared a quarterly dividend of $1.08 per share, an increase of close to 20% from the previous dividend of $0.90 per share. The forward yield was 2.76%. The dividend is payable to shareholders by early September. The firm has been paying a growing dividend to shareholders for the past fifty-four years.

On June 7, DA Davidson analyst Michael Baker maintained a Buy rating on Target Corporation (NYSE:TGT) stock and lowered the price target to $171 from $205, noting the tough decisions the firm was making to set up for a “better second half with cleaner inventories”.

Among the hedge funds being tracked by Insider Monkey, Boston-based Arrowstreet Capital is a leading shareholder in Target Corporation (NYSE:TGT) with 2.5 million shares worth more than $530 million.

In its Q2 2021 investor letter, Nelson Capital Management, an asset management firm, highlighted a few stocks and Target Corporation (NYSE:TGT) was one of them. Here is what the fund said:

“We added Target Corporation (NYSE:TGT) to our consumer staples sector. Target Corporation (NYSE:TGT) offers a broad array of products in owned and known brand items at affordable prices. Its omni-channel fulfillment centers allow customers to receive their items via in-store pickup, curbside pickup, same-day shipping and regular shipping while simultaneously reducing operating costs. With a significantly lower valuation than peers and a unique operating strategy, Target Corporation (NYSE:TGT) is an attractive holding.”

9. Colgate-Palmolive Company (NYSE:CL)

Number of Hedge Fund Holders: 50

PE Ratio: 30.76

YTD Decline in Share Price as of June 15: 11.93%

Colgate-Palmolive Company (NYSE:CL) makes and sells consumer products. The firm is one of the most reliable players in the consumer products space with a dividend history stretching back close to six decades. In the past 21 years, these payouts have been consistently growing. On June 9, the firm declared a quarterly dividend of $0.47 per share, in line with previous. The forward yield was 2.45%.

On May 23, Barclays analyst Lauren Lieberman maintained an Equal Weight rating on Colgate-Palmolive Company (NYSE:CL) stock and lowered the price target to $71 from $77, noting that estimates were being reduced across the large cap personal care sector for 2023.

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm First Eagle Investment Management is a leading shareholder in Colgate-Palmolive Company (NYSE:CL) with 11 million shares worth more than $856 million.

8. 3M Company (NYSE:MMM)

Number of Hedge Fund Holders: 51

PE Ratio: 14.08

YTD Decline in Share Price as of June 15: 23.88%

3M Company (NYSE:MMM) is a diversified technology company. On June 10, the company announced that it had obtained approval from Belgian authorities to begin the process toward resuming PFAS manufacturing operations at its Zwijndrecht facility. The expects several weeks for the process to move towards manufacturing. The company also said it is in talks with the government to fund cheaper cleanup actions at the facility.

3M Company (NYSE:MMM) posted earnings for the first quarter of 2022 on April 26, reporting earnings per share of $2.65, beating market estimates by $0.34. The revenue over the period was $8.8 billion, beating expectations by $50 million.

Among the hedge funds being tracked by Insider Monkey, Washington-based firm Fisher Asset Management is a leading shareholder in 3M Company (NYSE:MMM) with 6 million shares worth more than $898 million.

7. Walmart Inc. (NYSE:WMT)

Number of Hedge Fund Holders: 60

PE Ratio: 25.57

YTD Decline in Share Price as of June 15: 17.63%

Walmart Inc. (NYSE:WMT) operates as a retail firm. On June 8, the company announced that it was expanding partnerships with electric, hydrogen, and other clean energy power vehicles as it seeks to meet a zero emissions target set for 2040. The fleet of trucks used by the firm will be powered by companies like Chevron, Cummins, and Nikola. The firm is also expanding the use of hydrogen powered vehicles and has said it will use these as a superior option in the space if the price is brought down.

On June 5, Baird analyst Peter Benedict maintained an Outperform rating on Walmart Inc. (NYSE:WMT) stock with a price target of $155, noting that the firm offered a healthy “blend of defensive near-term appeal and disruptive longer-term optionality”.

Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm GQG Partners is a leading shareholder in Walmart Inc. (NYSE:WMT) with 15 million shares worth more than $2.2 billion.

6. PepsiCo, Inc. (NASDAQ:PEP)

Number of Hedge Fund Holders: 62

PE Ratio: 21.25

YTD Decline in Share Price as of June 15: 8.76%

PepsiCo, Inc. (NASDAQ:PEP) makes and sells beverages and convenient foods. The firm has a solid track record in the dividend space and has paid a growing dividend to shareholders for the past fifty years. On May 3, the firm declared a quarterly dividend of $1.15 per share, an increase of close to 7% from the previous dividend of $1.075 per share. The forward yield was 2.74%. The dividend is payable to shareholders by late June.

On April 27, Guggenheim analyst Laurent Grandet maintained a Buy rating on PepsiCo, Inc. (NASDAQ:PEP) and raised the price target to $193 from $188, appreciating another strong quarter of earnings by the company.

At the end of the first quarter of 2022, 62 hedge funds in the database of Insider Monkey held stakes worth $4.8 billion in PepsiCo, Inc. (NASDAQ:PEP), compared to 60 in the previous quarter worth $4.6 billion.

Along with Lowe’s Companies, Inc. (NYSE:LOW), Johnson & Johnson (NYSE:JNJ), and The Procter & Gamble Company (NYSE:PG), PepsiCo, Inc. (NASDAQ:PEP) is one of the stocks that hedge funds are monitoring.

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