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First-Quarter S&P Losers
The four worst performing stocks in the S&P 500 during the first quarter of 2011 were primarily from the financial and technology sector, and they did poorly for a variety of reasons, ranging from suspect balance sheets to missed earnings and weak guidance.
TUTORIAL: Ratio Analysis
Monster Worldwide (NYSE:MWW) claimed the title of worst-performing stock in the S&P 500 for Q1 by falling 32%. Monster Worldwide committed the unforgivable sin of disappointing investors' expectations when it released guidance on sales and earnings for the first quarter of 2011 and the full year. The stock fell sharply after that and has been treading water since then.
The good news on the job market is that the monthly job index published by the company increased in March 2011 to the highest level in five months and is 9% above the level reported in March 2010. The index measures online job postings seen on corporate sites and job boards.
American International Group (NYSE:AIG) also had a pitiful quarter. The stock reached a multiyear high near $52 per share at the start of 2011, and has fallen steadily ever since, declining 27% during the first quarter. Some of the decline was due to warrants issued by the company earlier in 2011.
Hudson City Bancorp (Nasdaq:HCBK) was down 24% as the bank dealt with a range of issues during the quarter. The company started off with disappointing results when it reported earnings, and then had to deal with reports that the Office of Thrift Supervision would issue a memorandum of understanding that said the bank would have to reduce its interest rate risk and funding concentration.
Hudson City Bancorp held $12.5 billion in structured quarterly putable borrowings on its balance sheet, and the regulators were concerned that the bank's borrowings would have to be replaced when interest rates rose.
Hudson City Bancorp decided to put the issue to rest toward the end of the first quarter, and closed out the position. The bank will take a charge that will reduce after-tax earnings by approximately $644 million, or $1.30 per share. Hudson City Bancorp said that there would be no impact on its Tier-1 leverage capital ratio, which the bank expects to reach 8%.
F5 Networks (Nasdaq:FFIV) lost 22% during the quarter as the stock was hit by concerns about growth in 2011. In January 2011, the company reported a disappointing quarter, with the company's book-to bill-ratio falling below 1, a level that seemed to indicate a slowdown in growth. F5 Networks also released revenue guidance for the second quarter that was below consensus.
F5 Networks rallied over the next month but that gain wasn't sustainable and the stock moved lower for the rest of the quarter, as analysts cut estimates and the bear case gained momentum.
The Bottom Line
Stocks from the financial and technology sector dominated the list of biggest losers in the S&P 500 during the first quarter of 2011. These companies landed there for various reasons including missed earnings and weak guidance. (These five qualitative measures allow investors to draw conclusions about a corporation that are not apparent on the balance sheet. Check out Using Porter's 5 Forces To Analyze Stocks.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
TUTORIAL: Ratio Analysis
Monster Worldwide (NYSE:MWW) claimed the title of worst-performing stock in the S&P 500 for Q1 by falling 32%. Monster Worldwide committed the unforgivable sin of disappointing investors' expectations when it released guidance on sales and earnings for the first quarter of 2011 and the full year. The stock fell sharply after that and has been treading water since then.
The good news on the job market is that the monthly job index published by the company increased in March 2011 to the highest level in five months and is 9% above the level reported in March 2010. The index measures online job postings seen on corporate sites and job boards.
American International Group (NYSE:AIG) also had a pitiful quarter. The stock reached a multiyear high near $52 per share at the start of 2011, and has fallen steadily ever since, declining 27% during the first quarter. Some of the decline was due to warrants issued by the company earlier in 2011.
Hudson City Bancorp (Nasdaq:HCBK) was down 24% as the bank dealt with a range of issues during the quarter. The company started off with disappointing results when it reported earnings, and then had to deal with reports that the Office of Thrift Supervision would issue a memorandum of understanding that said the bank would have to reduce its interest rate risk and funding concentration.
Hudson City Bancorp decided to put the issue to rest toward the end of the first quarter, and closed out the position. The bank will take a charge that will reduce after-tax earnings by approximately $644 million, or $1.30 per share. Hudson City Bancorp said that there would be no impact on its Tier-1 leverage capital ratio, which the bank expects to reach 8%.
F5 Networks (Nasdaq:FFIV) lost 22% during the quarter as the stock was hit by concerns about growth in 2011. In January 2011, the company reported a disappointing quarter, with the company's book-to bill-ratio falling below 1, a level that seemed to indicate a slowdown in growth. F5 Networks also released revenue guidance for the second quarter that was below consensus.
F5 Networks rallied over the next month but that gain wasn't sustainable and the stock moved lower for the rest of the quarter, as analysts cut estimates and the bear case gained momentum.
The Bottom Line
Stocks from the financial and technology sector dominated the list of biggest losers in the S&P 500 during the first quarter of 2011. These companies landed there for various reasons including missed earnings and weak guidance. (These five qualitative measures allow investors to draw conclusions about a corporation that are not apparent on the balance sheet. Check out Using Porter's 5 Forces To Analyze Stocks.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
by
Eric Fox
Eric J. Fox, CFA, is a freelance financial writer and has previous experience working in the asset management industry as an equity analyst and portfolio manager on the buy side. His favorite area to write on is the energy sector and he keeps current on the industry by reading Haynesville Shale, Permian Oil and Gas and various other blogs.
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