In one of previous articles we talked about stocks that would bring us the best returns during this year. Unfortunately on the other side, there are stocks whose performances were, well, awful. Stocks of these companies will be the subject of this article.
As nobody likes losses, it would be helpful to know what have these poorly performing stocks in common. Listing 20 worst performing companies might not be enough, but it can be a good start. All companies are traded on American stock exchanges.
Companies, sectors, market capitalizations and their performances since the beginning of this year can be seen in the table below.
|No.||Company||Perf YTD||Sector||Market Cap|
|1||Rock Creek Pharmaceuticals, Inc.||-97.81%||Healthcare||0.39M|
|2||Skyline Medical Inc.||-95.58%||Healthcare||8.60M|
|3||Great Basin Scientific, Inc.||-94.44%||Healthcare||13.03M|
|8||Paragon Shipping Inc.||-88.08%||Services||0.50M|
|9||Stone Energy Corp.||-87.34%||Basic Materials||30.79M|
|10||ProNAi Therapeutics, Inc.||-86.30%||Healthcare||62.15M|
|11||Aegerion Pharmaceuticals, Inc.||-85.15%||Healthcare||44.21M|
|12||Eagle Bulk Shipping Inc.||-84.80%||Services||24.47M|
|14||QKL Stores Inc.||-82.86%||Services||0.18M|
|15||BIND Therapeutics, Inc.||-82.10%||Healthcare||8.57M|
|16||TetraLogic Pharmaceuticals Corp.||-82.08%||Healthcare||7.71M|
|17||Azure Midstream Partners, LP||-80.32%||Basic Materials||12.27M|
|18||SAExploration Holdings, Inc.||-80.30%||Basic Materials||6.99M|
|19||C&J Energy Services, Ltd.||-80.25%||Basic Materials||112.66M|
|20||Pernix Therapeutics Holdings, Inc.||-79.95%||Healthcare||36.13M|
If we invested 1 000 dollars into Rock Creek Pharmaceuticals, we would be left with not even 30 dollars if we held until now. Pretty ugly result. Huge losses would be also caused by speculating on other companies listed above, unless we would shorted them.
We can see that the sector that dominates the list is healthcare, which also dominated the list of top performers. Therefore in this sector it is either big profit or big loss. But, if we compare it with list of top performers, big loss related to this sector wins, as 60% companies in the list above do business in healthcare (12 out of 20) in comparison with 40% companies belonging to same sector in list of top performers. Assuming this as true for broader market, we have bigger chance of picking stocks of healthcare company that would result in loss, than in profit.
Besides healthcare, falling oil prices caused that some producers with higher costs haven´t had it easy to stay alive, to which adapted stock prices and results can be seen above – 20% of companies on the list do business in oil industry.
Average market cap of companies is 24,85 million dollars, with maximum over 112,6 million and minimum 0,18 million dollars.
So what do these companies have in common? Hard to say, but the share of healthcare companies can indicate that we should maybe avoid this sector. Even though also companies from top performers list belong to this sector, it just confirms the significant risk and extreme volatility related to healthcare companies. But, for people loving taking risk, stocks of these companies may become another part of your portfolio.