Talking Numbers

These stocks could be ready for a turnaround

Talking Numbers

Two out of the three worst S&P 500 stocks of 2012 are doing great this year. Is there a chance of a turnaround for this year's worst?

Could something so bad actually be good?

The answer is yes when it comes to the stock market.

At the end of 2012, the three worst stocks in the S&P 500 were Apollo Group, AMD, and BestBuy. While Apollo Group continues to have problems this year, AMD and Best Buy are up 51% and 150% respectively since the start of 2013.

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S&P 500's worst of 2012

That got us thinking: What about the three worst S&P 500 stocks so far in 2013? Is there a chance one of them can turnaround like AMD and BestBuy?

Right now, the bottom three stocks in the S&P 500 are all mining stocks: Cliffs Natural Resources (iron), Peabody Energy (coal), and Newmont Mining (gold). Of those three has the potential to improve, says Talking Numbers contributor Enis Taner, Global Macro Editor at RiskReversal.com.

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S&P 500's worst of 2013

Taner believes Newmont Mining is best poised for a rebound. The company, which released second-quarter earnings last night, announced a $1.8 billion dollar write-down due to lower gold and copper prices in the second-quarter of 2013. It had a total loss of $2 billion or $4.06 per share while analysts were instead expecting a profit of $0.42 per share. The company also said they were reducing its quarterly dividend to $0.25 per share from $0.35, citing the decline in gold prices as a reason for doing so.

(Related: Dennis Gartman: Gold is going 'several hundred dollars higher')

The overall sector is fairing worse than Newmont itself. The Market Vectors Gold Miners ETF (the GDX) is down 41% this year compared to Newmont’s drop of 35%. However, Taner believes Newmont has significant advantages over other gold miners.

But do the charts agree? JC O’Hara, Chief Market Technician at FBN Securities, believes the charts have a lot to say about Newmont Mining.

To hear Taner and O’Hara give their individual takes on Newmont Mining, watch the video above.

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