20 Worst Performing S&P 500 Stocks in 2023
In this article, we discuss 20 worst performing S&P 500 stocks in 2023. If you want to skip our detailed analysis of the stock market outlook, skip over to 5 Worst Performing S&P 500 Stocks in 2023.
Wall Street analysts are still largely split when it comes to their forecasts for the S&P 500 index, despite the year being halfway through. The difference in opinion among analysts has grown even more since the benchmark index emerged from its lengthiest bear market since 1948. Goldman Sachs raised its end of year target for the S&P 500 from 4,000 to 4,500, noting that their 2023 earnings-per-share projections remain unmodified. Goldman Sachs speculates that a soft landing will be delivered by the Federal Reserve, despite the brutal interest rate hikes over the last year to counter inflation. The firm believes that market sectors that are underperforming so far have the potential to keep pace with market leaders. The mega-cap tech stocks are dominating the market this year, and the profits from artificial intelligence can potentially prolong the current stock market upswing. On the other hand, Morgan Stanley reiterated its negative stance on the stock market, noting that the bear market is not over and an earnings recession is projected to hinder any further gains. Michael Wilson, the chief equity strategist at Morgan Stanley, expects the S&P 500 to sink to 3,900 by year-end.
On May 23, Reuters polled 43 Wall Street strategists and they believe that the S&P 500 index is expected to experience a decline by the end of 2023. These strategists think that investor sentiment will be negatively impacted due to high interest rates, banking failures, and disappointing earnings. They expect the S&P 500 index to close at 4,150 at the end of 2023. The substantial gains this year are predominantly attributed to the growth and technology sectors, which led to significant market rallies and offset some of the instability caused by collapsing regional banks. According to Jonathan Golub, head of U.S. equity strategy and quantitative research for Credit Suisse, the S&P 500 will likely close at 4,050 at the end of this year. He told Reuters:
"It's just a very uninspiring, low-growth backdrop, with tight monetary policy and earnings that will be down this year versus last."
Data from Refinitiv suggests that the forward 12-month price-to-earnings ratio of the S&P 500 is presently 19, compared to 17 recorded at the end of 2022 and exceeding the long-term average of approximately 16. UBS Global Wealth Management has a year-end S&P 500 target of 3,800, and Nadia Lovell, a senior U.S. equity strategist at UBS, said:
"Historically, when you've seen this level of valuation, it's normally associated with re-acceleration in earnings and also an outlook for double-digit earnings growth going forward. We don't see that happening."
Market expectations are increasingly varied. For example, RBC Capital, citing improved earnings expectations, limited layoffs, and rebounding corporate sentiment, raised its end of year S&P 500 price target to 4,250 from 4,100. Bloomberg cited Lori Calvasina, head of US equity strategy at RBC Capital, who commented:
“While our new target still reflects a fairly neutral view on the direction of stocks through year end, when asked we do acknowledge more upside risks than downside risks. We’ve also been struck by how many bearish leaning investors have been asking us to walk them through the bull case and explain why stocks have been so resilient.”
Amid the mixed market sentiment on Wall Street, some of the worst performing S&P 500 stocks include DISH Network Corporation (NASDAQ:DISH), Advance Auto Parts, Inc. (NYSE:AAP), and Newell Brands Inc. (NASDAQ:NWL).
Our Methodology
For this list, we screened the S&P 500 stocks and chose the 20 worst performing companies based on highest decline in share prices year-to-date as of June 16, 2023. We have ranked the list in ascending order of the year-to-date share price drop.
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Worst Performing S&P 500 Stocks in 2023
20. MetLife, Inc. (NYSE:MET)
Year-to-Date Share Price Decline: 23.08%
Number of Hedge Fund Holders: 43
MetLife, Inc. (NYSE:MET) provides financial services, dealing in insurance, annuities, employee benefits, and asset management services worldwide. The company was founded in 1863 and is headquartered in New York. On May 3, MetLife, Inc. (NYSE:MET) reported a Q1 non-GAAP EPS of $1.52 and a revenue of $16.12 billion, falling short of Wall Street estimates by $0.34 and $720 million, respectively. However, on May 25, MetLife, Inc. (NYSE:MET)’s board authorized a $1 billion increase in the share repurchases, making the total share repurchase authorization outstanding approximately $4 billion.
According to Insider Monkey’s first quarter database, 43 hedge funds were long MetLife, Inc. (NYSE:MET), with combined stakes worth $812.4 million. Richard S. Pzena’s Pzena Investment Management is the largest stakeholder of the company, with 4.18 million shares worth $242.3 million.
Like DISH Network Corporation (NASDAQ:DISH), Advance Auto Parts, Inc. (NYSE:AAP), and Newell Brands Inc. (NASDAQ:NWL), MetLife, Inc. (NYSE:MET) is one of the worst performing S&P 500 stocks in 2023.
19. International Flavors & Fragrances Inc. (NYSE:IFF)
Year-to-Date Share Price Decline: 23.94%
Number of Hedge Fund Holders: 41
International Flavors & Fragrances Inc. (NYSE:IFF) manufactures and markets cosmetic active and natural health ingredients that are used in consumer products. It operates through four segments – Nourish, Scent, Health & Biosciences, and Pharma Solutions. International Flavors & Fragrances Inc. (NYSE:IFF) shares declined nearly 24% year-to-date as of June 16, making it one of the worst performing S&P stocks.
On May 8, International Flavors & Fragrances Inc. (NYSE:IFF) reported a Q1 non-GAAP EPS of $0.87, missing Wall Street estimates by $0.02. The revenue of $3.03 billion fell 5.3% as compared to the prior-year quarter, but outperformed market consensus by $50 million.
According to Insider Monkey’s first quarter database, International Flavors & Fragrances Inc. (NYSE:IFF) was part of 41 hedge fund portfolios, compared to 39 in the earlier quarter. Scott Ferguson’s Sachem Head Capital is the largest stakeholder of the company, with 6.68 million shares worth $614.7 million.
Here is what Rhizome Partners has to say about International Flavors & Fragrances Inc. (NYSE:IFF) in its Q1 2021 investor letter:
“We are still getting used to the higher multiples that investors will pay for larger market cap and pure play companies such as IFF. We do understand the market’s rationale. IFF’s products account for a small percentage of the customers’ cost while playing critical roles in the products’ performance. With some operating leverage, the company can probably grow FCF at 4-6% a year. This brings the total return close to the long-term return of the S&P 500 index of 10%. Through trial and error, we have come to appreciate how scale, higher market share, route densities, switching costs, and collaborative relationships amongst major industry players can contribute to sustained high returns on invested capital.”
18. The AES Corporation (NYSE:AES)
Year-to-Date Share Price Decline: 24.08%
Number of Hedge Fund Holders: 44
The AES Corporation (NYSE:AES) is a power generation and utility company using coal, gas, hydro, wind, solar, biomass, and renewable sources. The company serves users in residential, commercial, industrial, and governmental sectors. The AES Corporation (NYSE:AES) is one of the worst performing S&P 500 players based on the year-to-date share price decline as of June 15.
On May 4, The AES Corporation (NYSE:AES) reported a Q1 non-GAAP EPS of $0.22, in-line with market consensus. The revenue increased 13.7% year-over-year to $3.24 billion, outperforming Wall Street estimates by $400 million.
According to Insider Monkey’s first quarter database, 44 hedge funds held stakes worth $1.1 billion in The AES Corporation (NYSE:AES), compared to 44 funds in the prior quarter holding stakes worth $1.3 billion.
Massif Capital made the following comment about The AES Corporation (NYSE:AES) in its Q4 2022 investor letter:
“We currently have roughly 13% of the portfolio allocated to two utilities: The AES Corporation (NYSE:AES) and Polaris (PIF). We invested in AES in December 2020 at an average entry price of $21.3 and invested in PIF in July 2020 at an average entry price of 16.36 CAD. We are currently underwater on PIF and making money in AES. Our near-term outlook for both positions is mixed. AES had a solid year in 2022, up 13%; it has telegraphed growth in earnings and cash flow through 2025 and seems to be hitting its targets. We will have to see what the year holds for utilities and AES, but another year like last year, and the firm will be touching our full value expectations.”
17. U.S. Bancorp (NYSE:USB)
Year-to-Date Share Price Decline: 25.07%
Number of Hedge Fund Holders: 48
U.S. Bancorp (NYSE:USB) was founded in 1863 and is headquartered in Minneapolis, Minnesota. It is a financial services company that operates through Corporate and Commercial Banking, Consumer and Business Banking, Wealth Management and Investment Services, Payment Services, and Treasury and Corporate Support segments. As of June 16, U.S. Bancorp (NYSE:USB)’s share price has fallen 25% year-to-date, categorizing it as one of the worst performing S&P 500 stocks this year.
On June 13, U.S. Bancorp (NYSE:USB) declared a quarterly dividend of $0.48 per share, in line with previous. The dividend is distributable on July 17, to shareholders of record on June 30.
According to Insider Monkey’s first quarter data, U.S. Bancorp (NYSE:USB) was part of 48 hedge fund portfolios, compared to 58 in the prior quarter. Warren Buffett’s Berkshire Hathaway, which had been a long-term stakeholder of U.S. Bancorp (NYSE:USB), sold all its shares during the first quarter of 2023.
Mairs & Power Growth Fund made the following comment about U.S. Bancorp (NYSE:USB) in its first quarter 2023 investor letter:
“Financials were roiled in the quarter thanks to the Silicon Valley Bank and Signature Bank failures. Even though the Fund has a similar weight to Financials as the index, our bank stocks—U.S. Bancorp (NYSE:USB), JPMorgan Chase (JPM), Wells Fargo (WFC), and Charles Schwab (SCHW)—fell more than the Financials sector and hurt relative performance. We have performed a thorough analysis of our banking stocks and believe that they will exit this banking event intact, and a few may even benefit from the sector turmoil.
The largest detractors from relative performance in the quarter were US Bank, Charles Schwab, UnitedHealth Group (UNH), and Hormel (HRL). The first two got caught up in the previously mentioned bank scare. With the selloff in the quarter, we have added to US Bank selectively, but more so to JPMorgan as it appears better positioned to gather deposits in the current environment.”
16. Organon & Co. (NYSE:OGN)
Year-to-Date Share Price Decline: 25.51%
Number of Hedge Fund Holders: 33
Organon & Co. (NYSE:OGN) is a New Jersey-based company that provides prescription therapies and medical devices for women's health. Year-to-date, Organon & Co. (NYSE:OGN)’s share price has tanked 25.5% as of June 16, putting it on our list of the worst performing S&P 500 stocks in 2023.
On May 4, Organon & Co. (NYSE:OGN) reported a Q1 non-GAAP EPS of $1.08, missing Wall Street estimates by $0.08. The revenue of $1.54 billion dropped 1.9% year-over-year, but was in-line with market consensus.
According to Insider Monkey’s first quarter database, 33 hedge funds were long Organon & Co. (NYSE:OGN), compared to 37 funds in the preceding quarter. Steven Boyd’s Armistice Capital is the biggest stakeholder of the company, with 3.20 million shares worth $75.2 million.
Miller Value Partners made the following comment about Organon & Co. (NYSE:OGN) in its Q3 2022 investor letter:
“Organon & Co. (NYSE:OGN) was the top detractor for the quarter, falling 30.0%2. Organon reported 2Q22 revenue of $1.59 billion, -0.6% Y/Y, ahead of consensus of $1.54 billion, and Adjusted EPS of $1.25, -27.3% Y/Y, in-line with analyst expectations. Adjusted EBITDA for the quarter came in at $512 million (32.3% margin), compared to 2Q21 Adjusted EBITDA of $627 million (39.3% margin). Management revised FY22 guidance for revenue of $6.1-6.3 billion, compared to previous guidance for revenue of $6.1-6.4 billion, to reflect persisting foreign exchange (FX) headwinds, and Adjusted EBITDA margin of 32-34%, compared to prior guidance for a margin of 34-36%, which incorporates ~$110 million of in-process research and development (IPR&D) and milestone expenses from business development. Management’s guidance implies FY22 Adjusted EBITDA of $2.05B, at the respective midpoints, or an Enterprise Value (EV)/EBITDA multiple of ~7.0x.”
15. Truist Financial Corporation (NYSE:TFC)
Year-to-Date Share Price Decline: 26.89%
Number of Hedge Fund Holders: 48
Truist Financial Corporation (NYSE:TFC) is a North Carolina-based provider of banking and trust services in the Southeastern and Mid-Atlantic United States. On April 20, Truist Financial Corporation (NYSE:TFC) reported a Q1 GAAP EPS of $1.05, missing analysts’ estimates by $0.09. The revenue of $6.15 billion climbed 15% year-over-year and topped market consensus by $60 million. As of June 16, the stock price has fallen nearly 27% year-to-date, making Truist Financial Corporation (NYSE:TFC) one of the worst performing S&P 500 members in 2023.
On June 16, Odeon Capital analyst Dick Bove downgraded Truist Financial Corporation (NYSE:TFC) from Buy to Hold as the bank grappled to generate higher revenue with deposit costs increasing.
According to Insider Monkey’s Q1 database, 48 hedge funds were bullish on Truist Financial Corporation (NYSE:TFC), compared to 44 funds in the prior quarter. Ric Dillon’s Diamond Hill Capital is the biggest stakeholder of the company, with 16.7 million shares worth $569.3 million.
Ave Maria Rising Dividend Fund made the following comment about Truist Financial Corporation (NYSE:TFC) in its Q1 2023 investor letter:
“The weakest performers were the Energy, Financials, and Consumer Discretionary sectors. Off the heels of last year’s outstanding performance, the Fund’s Energy stocks were down -16%. Financials were down -5%, primarily due to Truist Financial Corporation (NYSE:TFC) (bank), as banks sold off due to the failure of SVB Financial Group. Consumer Discretionary finished the quarter up but was pulled down by the -9% performance of RH (home products store).”
14. CVS Health Corporation (NYSE:CVS)
Year-to-Date Share Price Decline: 27.11%
Number of Hedge Fund Holders: 77
CVS Health Corporation (NYSE:CVS) is a health services provider in the United States. It operates through Health Care Benefits, Pharmacy Services, and Retail/LTC segments. On May 25, CVS Health Corporation (NYSE:CVS) disclosed that only 21% of its Medicare Advantage members are enrolled in plans that have a star rating of four or higher, which will result in its net income dropping between $800 million to $1 billion in 2024. As of June 16, CVS Health Corporation (NYSE:CVS) stock has declined 27% year-to-date, making it one of the worst performing members of the S&P 500 this year.
According to Insider Monkey’s first quarter database, 77 hedge funds were bullish on CVS Health Corporation (NYSE:CVS), compared to 70 funds in the preceding quarter. John Overdeck and David Siegel’s Two Sigma Advisors is the biggest position holder in the company.
Greenlight Capital made the following comment about CVS Health Corporation (NYSE:CVS) in its Q1 2023 investor letter:
“Second, we will discuss Oak Street Health (OSH), which we closed out after costing us 0.8% (net) during the quarter. CVS Health Corporation (NYSE:CVS) is buying OSH for $39 per share, or about $10 billion. When shorting, there is always the risk that someone with deep pockets will buy out the company at a silly price, or maybe even at twice a silly price. CVS is worth $115 billion (or it was the day they announced the deal; subsequently, CVS’s shares have fallen and it’s now worth $93 billion), so it can afford to piss away $10 billion.
OSH is in value-based care, which has become a trendy segment of the market. Most of the “value” comes from doing a more thorough and aggressive job of documenting how sick a patient is, so as to maximize Medicare payments. OSH operates 169 clinics (costing between $1.5-$2 million to build) in mostly lower income neighborhoods and employs 600 doctors. CVS projects that in 2026 the pro forma entity will have 300 clinics and “embedded EBITDA” of $2 billion, plus over $500 million of synergies.
In 2022, OSH generated less than $1 million of adjusted revenue per doctor2 and lost $500 million (almost $3 million per clinic). Even if it triples the number of doctors by 2026, it will need over $1 million of “embedded EBITDA” per doctor, implying margins shifting from a loss to nearly 100%. Obviously, this can’t happen, as the doctors need to be paid and there are other substantial costs. The amazing thing is that when rumors of this deal circulated, we reached out to CVS management and had a call where we walked them through the math… and they went ahead with the deal anyway. When the proxy came out, it revealed that OSH conducted an auction and, like a late-night eBay shopper who had one too many glasses of wine, CVS raised its uncontested bid several times… Rant over.”
13. Moderna, Inc. (NASDAQ:MRNA)
Year-to-Date Share Price Decline: 28.08%
Number of Hedge Fund Holders: 40
Moderna, Inc. (NASDAQ:MRNA), the American pharmaceutical giant, is one of the worst performing S&P 500 constituents so far in 2023. The share price plummeted 28% year-to-date as of June 16, 2023.
On May 4, Moderna, Inc. (NASDAQ:MRNA) reported a Q1 GAAP EPS of $0.19 and a revenue of $1.9 billion, topping Wall Street estimates by $1.94 and $730 million, respectively. While revenue exceeded market consensus, it experienced a decline of 69% compared to the same period in 2022, mainly due to lower sales volume.
According to Insider Monkey’s first quarter database, 40 hedge funds were bullish on Moderna, Inc. (NASDAQ:MRNA), down from 52 funds in the prior quarter. Philippe Laffont’s Coatue Management is the biggest stakeholder of the company, with 6.5 million shares worth $1 billion.
Baron Health Care Fund made the following comment about Moderna, Inc. (NASDAQ:MRNA) in its Q1 2023 investor letter:
“Moderna, Inc. (NASDAQ:MRNA) is a leader in the emerging field of mRNA-based vaccines and therapeutics and was one of the three main producers of the COVID vaccine. Shares fell during the quarter. We believe as COVID shifts away from pandemic status and becomes an increasingly commercial market (rather than government funded), there is increasing investor uncertainty around what a booster market could look like, which is pressuring shares. Looking beyond COVID, we think Moderna has the potential to disrupt the biopharmaceutical industry, from infectious disease vaccines to oncology, and we remain shareholders.”
12. Enphase Energy, Inc. (NASDAQ:ENPH)
Year-to-Date Share Price Decline: 28.23%
Number of Hedge Fund Holders: 55
Enphase Energy, Inc. (NASDAQ:ENPH) is a California-based based company that designs and manufactures home energy solutions for the solar industry in the United States and internationally. Enphase Energy, Inc. (NASDAQ:ENPH) shares have lost 28.23% in value since the beginning of this year till June 16, consequently making it to our list of the worst performing S&P 500 stocks in 2023.
Although Enphase Energy, Inc. (NASDAQ:ENPH) reported better than forecasted Q1 adjusted earnings and revenues, the company guided Q2 revenues below Wall Street estimates. Enphase expects Q2 revenue to range between $700 million to $750 million, falling short of the market consensus of $760 million. The gross margin in Q2 is expected to be 41% to 44%, which is lower than Q1.
According to Insider Monkey’s first quarter database, 55 hedge funds were long Enphase Energy, Inc. (NASDAQ:ENPH), compared to 63 funds in the prior quarter. John Overdeck and David Siegel’s Two Sigma Advisors is a prominent stakeholder of the company, with 590,709 shares worth $124.2 million.
Aristotle Atlantic Large Cap Growth Strategy made the following comment about Enphase Energy, Inc. (NASDAQ:ENPH) in its Q1 2023 investor letter:
“Enphase Energy, Inc. (NASDAQ:ENPH) designs, develops, manufactures and sells home energy solutions in the U.S. and internationally for the solar industry. The company is the world’s leading manufacturer of microinverters that convert solar-generated D.C. energy to A.C. energy usable in homes and buildings. Enphase introduced the world’s first microinverter system in 2008 and has expanded its offerings to include battery storage systems and proprietary technologies that provide energy monitoring and control services for solar energy systems. It sells its products and solutions directly to solar system distributors, large installers and strategic partners.
We see Enphase having a substantial market share that is gained through a premium product offering, superior customer service and the development of a large and diverse network of solar installers and distributors. The company’s products and services address a growing residential solar market. Coupling battery backup systems with existing and newly installed residential solar systems could accelerate the company’s revenue and earnings growth over the next several years, in our view. Additionally, commercial and international expansion offer additional revenue and earnings upside. Enphase also plans to expand manufacturing capacity in the U.S. during 2023 to benefit from tax incentives related to domestic production included in the Inflation Reduction Act (IRA).”
11. V.F. Corporation (NYSE:VFC)
Year-to-Date Share Price Decline: 29.67%
Number of Hedge Fund Holders: 28
V.F. Corporation (NYSE:VFC) is a Colorado-based company engaged in the design and sale of branded apparel, footwear, and accessories in the Americas, Europe, and the Asia-Pacific. V.F. Corporation (NYSE:VFC) made it to our list of the worst performing S&P 500 stocks since the share price has plummeted about 30% year-to-date as of June 16.
On May 23, V.F. Corporation (NYSE:VFC) declared a $0.30 per share quarterly dividend, in line with previous. The dividend is payable on June 20, to shareholders of record on June 12.
According to Insider Monkey’s first quarter database, 28 hedge funds were bullish on V.F. Corporation (NYSE:VFC), compared to 25 funds in the prior quarter. D E Shaw is the biggest stakeholder of the company, with 2.7 million shares worth $62.2 million.
Diamond Hill Large Cap Strategy made the following comment about V.F. Corporation (NYSE:VFC) in its Q4 2022 investor letter:
“Apparel and footwear company V.F. Corporation (NYSE:VFC)’s stock declined in Q4 after management lowered guidance based on weaker-than-expected demand in North America, higher promotions and elevated wholesale order cancellations. The company also announced a CEO transition, effective immediately. Following these developments, we sold our shares in favor of higher conviction ideas.”
10. Citizens Financial Group, Inc. (NYSE:CFG)
Year-to-Date Share Price Decline: 31.04%
Number of Hedge Fund Holders: 42
Citizens Financial Group, Inc. (NYSE:CFG) is the bank holding company for Citizens Bank, National Association. The company operates in two segments – Consumer Banking and Commercial Banking. As of June 16, Citizens Financial Group, Inc. (NYSE:CFG) stock was down 31% year-to-date, making it one of the worst performing S&P 500 names.
On April 19, Citizens Financial Group, Inc. (NYSE:CFG) reported a Q1 non-GAAP EPS of $1.10 and a revenue of $2.13 billion, falling short of Wall Street estimates by $0.03 and $10 million, respectively.
According to Insider Monkey’s first quarter database, 42 hedge funds were bullish on Citizens Financial Group, Inc. (NYSE:CFG), compared to 45 funds in the last quarter. Brandon Haley’s Holocene Advisors is the biggest position holder in the company, with 2.20 million shares worth $67 million.
9. EPAM Systems, Inc. (NYSE:EPAM)
Year-to-Date Share Price Decline: 33.77%
Number of Hedge Fund Holders: 34
EPAM Systems, Inc. (NYSE:EPAM) specializes in digital platform engineering and software development services worldwide. The stock has declined nearly 34% year-to-date as of market close on June 16, making EPAM Systems, Inc. (NYSE:EPAM) one of the worst performing S&P 500 constituents.
On June 5, EPAM Systems, Inc. (NYSE:EPAM) trimmed its Q2 and FY23 outlook because of further downturn in short-term demand. For FY23, the company forecasts revenues between $4.650 billion to $4.80 billion, down from the earlier guidance of $4.95 billion to $5.00 billion.
According to Insider Monkey’s first quarter database, 34 hedge funds were bullish on EPAM Systems, Inc. (NYSE:EPAM), compared to 35 funds in the preceding quarter. Stephen Mandel’s Lone Pine Capital is the largest stakeholder of the company, with 965,588 shares worth $288.7 million.
Harding Loevner Emerging Markets Equity Strategy made the following comment about EPAM Systems, Inc. (NYSE:EPAM) in its Q1 2023 investor letter:
“The portfolio’s returns in the roaring IT sector were hampered by software-engineering company EPAM Systems, Inc. (NYSE:EPAM) and payment-services provider Network International. EPAM signaled a more cautious outlook for growth and cost pressures related to the geographic reconfiguration of its East European engineering workforce in the wake of the war in Ukraine. UAE-based Network International indicated that challenging macroeconomic conditions in Africa may hinder near-term growth. In Communication Services, detractors included Safaricom, the leading mobile-network operator and payment-services company in Kenya, where the currency has weakened amid high inflation and a sizable current account deficit.
Buying Globant didn’t increase our portfolio weight in IT services, as the purchase was funded by reducing two other industry holdings, EPAM and Tata Consultancy Services, for which valuations had become less attractive. EPAM’s share price fell sharply in early 2022 after Russia invaded Ukraine, given that close to 60% of the company’s staff was working in the affected countries of Russia, Ukraine, and Belarus. We were patient through this period as EPAM management restructured its workforce; only 30% are now based in these three countries. Despite the disruption, productivity remained comparable to pre-war times, and EPAM managed to retain nearly all of its customers. As a result, the stock recovered from its lows last year, offering an opportunity to trim our position.”
8. Dollar General Corporation (NYSE:DG)
Year-to-Date Share Price Decline: 33.40%
Number of Hedge Fund Holders: 53
Dollar General Corporation (NYSE:DG) stock has plummeted 33.4% year-to-date as of market close on June 16, 2023. This categorizes the American discount retailer as one of the worst performing S&P 500 entities so far this year.
On June 1, Dollar General Corporation (NYSE:DG) reported a Q1 GAAP EPS of $2.34 and a revenue of $9.34 billion, falling short of Wall Street estimates by $0.05 and $120 million, respectively. For FY2023, the company pulled back its previous guidance. Now, Dollar General Corporation (NYSE:DG) expects net sales growth ranging from 3.5% to 5.0%, compared to its previous estimate of 5.5% to 6%. Similarly, the diluted EPS is forecasted to decrease by around 8% or remain flat, in contrast to the previous projection of approximately 4% to 6% growth.
According to Insider Monkey’s first quarter database, 53 hedge funds were long Dollar General Corporation (NYSE:DG), compared to 59 funds in the preceding quarter. Ken Griffin’s Citadel Investment Group is the biggest stakeholder of the company, with 1.6 million shares worth $344.45 million.
Aristotle Atlantic Focus Growth Strategy made the following comment about Dollar General Corporation (NYSE:DG) in its Q1 2023 investor letter:
“Dollar General Corporation (NYSE:DG shares underperformed on a rotation out of more defensive consumer names at the start of the year despite growing concerns of a slowdown in the economy and the coinciding effects on consumer spending. During the first quarter, Dollar General reported solid comps, as their core lower-income consumer remained resilient despite rising inflation.”
7. The Charles Schwab Corporation (NYSE:SCHW)
Year-to-Date Share Price Decline: 33.61%
Number of Hedge Fund Holders: 87
The Charles Schwab Corporation (NYSE:SCHW) specializes in wealth management, securities brokerage, banking, asset management, custody, and financial advisory services. The financial holding company, however, ranks 7th on our list of the worst performing S&P 500 stocks as its share price has fallen 33.61% year-to-date.
On April 17, The Charles Schwab Corporation (NYSE:SCHW) reported a Q1 revenue of $5.12 billion, up 9.6% year-over-year but missing Street consensus by $10 million. Similarly, the company expects an even worse year-over-year drop in Q2 revenue, citing a reduced net interest margin (NIM) and a smaller base of interest-earning assets, combined with decreased trading activity.
According to Insider Monkey’s first quarter database, 87 hedge funds were bullish on The Charles Schwab Corporation (NYSE:SCHW), compared to 74 funds in the last quarter. D E Shaw is the biggest stakeholder of the company, with 12.2 million shares worth $642.7 million.
Generation Investment Management Global Equity Strategy made the following comment about The Charles Schwab Corporation (NYSE:SCHW) in its first quarter 2023 investor letter:
“Your portfolio has been relatively insulated from recent banking troubles. The Charles Schwab Corporation (NYSE:SCHW) is the only financials company in your portfolio (forming 2.37% of it). The company’s share price has suffered. We are watching the situation closely. Regulators have responded quickly to the turmoil. After a few weeks when people were withdrawing deposits from small banks across America, the rush seems to have slowed.
We do not have strong views on whether the banking turmoil will tip the global economy into recession. We are not economists, and in any case the global economy has rarely been so hard to predict. Forecasters are trying to weigh up a large number of highly unusual variables: a land war in Europe, the fallout from massive fiscal stimulus in 2020– 21 and high inflation. In this environment all judgments about the macro economy are uncertain.”
6. Comerica Incorporated (NYSE:CMA)
Year-to-Date Share Price Decline: 35.78%
Number of Hedge Fund Holders: 46
Comerica Incorporated (NYSE:CMA) provides financial products and services, operating through Commercial Bank, Retail Bank, Wealth Management, and Finance segments. On June 13, the company announced that it is going to disengage from the mortgage banker finance business by the end of 2023. Comerica highlighted the reduction of seasonal and cyclical fluctuations in its loan portfolio, enhancing the efficiency of capital utilization, and improving the stability of its liquidity as potential benefits of the exit. As of June 16, Comerica Incorporated (NYSE:CMA) stock has declined nearly 36% year-to-date.
According to Insider Monkey’s first quarter database, 46 hedge funds were bullish on Comerica Incorporated (NYSE:CMA), compared to 37 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is the largest stakeholder of the company, with a position worth $137.8 million.
In addition to DISH Network Corporation (NASDAQ:DISH), Advance Auto Parts, Inc. (NYSE:AAP), and Newell Brands Inc. (NASDAQ:NWL), Comerica Incorporated (NYSE:CMA) is one of the worst performing S&P 500 stocks this year.
Third Avenue Value Fund made the following comment about Comerica Incorporated (NYSE:CMA) in its first quarter 2023 investor letter:
“The largest detractors from Fund performance during the quarter included two banks, Comerica Incorporated (NYSE:CMA) and Deutsche Bank. As it relates to the Fund specifically, events within U.S. banking applied most directly to our investment in Comerica, a U.S. super-regional that does have a large portion of corporate deposits and is not classified as a globally systemically important bank (“G-SIB”), which means it has not recognized certain mark-to-market securities losses in its regulatory capital. Comerica was a 2.6% position at the beginning of the quarter, prior to a roughly 34% stock price decline during the quarter. After purchasing more shares following the stock price decline, the Fund’s position in Comerica was approximately 2.3% at quarter end. While the general contagion fears and bank depositor behavior remain a fluid situation today, we took some confidence from immediate, forceful and targeted actions by the Fed, FDIC and Treasury. In our view, the Fed’s Bank Term Funding Program (“BTFP”) seems a well-tailored and appropriate near-term liquidity solution that allows banks to obtain immediate liquidity, collateralized by the par value of securities, to meet any near-term deposit outflows. At the time of this writing, early signs are that the deposit flight from regional banks is calming rapidly and depositor psychology is improving, though this could change. To the extent that calming continues, our suspicion is that there may be very attractive bargains to be had among regional banks. More will be known in the coming days and weeks as information regarding deposit flows emanates post-quarter end. That said, there will remain some mystery around the extent of the bargains on offer because increases in FDIC funding, increases in regulatory capital requirements, more stringent liquidity stress testing, and changes to the list of banks subject to G-SIB regulatory regimes are all on the table now. It is also very likely that deposit costs, which had been rising very slowly, will rise much more rapidly as commercial banks work harder to entice depositors to stay put. None of these developments, if they eventuate, are likely to impact banks’ returns and earnings in a positive way.
More broadly, the Third Avenue Value Fund owned investments categorized as financials totaling 15.94% by weight, at quarter end. This category includes non-bank financials such as Old Republic, a U.S. property and casualty insurer and title insurance business, Lazard, an advisory business and asset management firm, and Ashmore, a U.K. asset management firm specializing in emerging markets credit. The Fund’s actual bank exposure at quarter end totaled 9.52% and comprises Bank of Ireland, Deutsche Bank and Comerica, in order of position size…” (Click here to read the full text)
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Disclosure: None. 20 Worst Performing S&P 500 Stocks in 2023 is originally published on Insider Monkey.
