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8 of the Worst Stocks in Gurus' Portfolios

- By Tiziano Frateschi

While gurus hold positions in these companies, the stock price and returns continue to fall. These are the worst-performing stocks over the last three months with a long-term presence in more than four gurus' portfolios.


Vera Bradley Inc. (VRA) had a negative performance of 27.3% over the last six months. Despite this, four mutual funds are holding the stock with a total weight of 4.56% on their portfolios.

The company has a market cap of $385.65 million, and the stock is trading with a price-sales (P/S) ratio of 0.82. The price of $10.65 is 48.43% below its 52-week high and 6.81% above its 52-week low. Over the last 10 years, it has returned a loss of 57%.

Over the last five years, Vera Bradley has reported a 4.70% increase in revenue, but a 2% decline in EBITDA, a 5.10% decline in free cash flow and an 11% decline in earnings per share (EPS).

The return on equity (ROE) of 11.44% and return on assets (ROA) of 8.79% are outperforming 65% of other companies in the Global Footwear & Accessories industry.

The company's largest shareholder among the gurus is Mariko Gordon (Trades, Portfolio) with 9.02% of outstanding shares, followed by Jim Simons (Trades, Portfolio) with 3.85%, Chuck Royce (Trades, Portfolio) with 2.13% and Barrow, Hanley, Mewhinney & Strauss with 0.76%.

MDC Partners Inc. Class A (MDCA) had a negative performance of 32.2% over the last six months. Regardless, four mutual funds are holding the stock with a total weight of 0.10% on their portfolios.

The company has a market cap of $489.48 million, and the stock is trading with a P/S ratio of 0.34. The price of $8.85 is 9.05% below its 52-week high and 221.82% above its 52-week low. Over the last 10 years, it has returned a gain of 75%.

Over the last five years, MDC Partners has reported an 8.80% increase in revenue, but a 14.20% decline in EPS.

Its ROA of -5.09% and retrun on capital (ROC) of -7.76% are lower than 72% of other companies in the Global Marketing Services industry.

Hotchkis & Wiley is the company's largest shareholder among the gurus with 7.43% of outstanding shares, followed by Leon Cooperman (Trades, Portfolio) with 0.55%, Steven Cohen (Trades, Portfolio) with 0.23% and Paul Tudor Jones (Trades, Portfolio) with 0.1%.

Vasco Data Security International Inc. (VDSI) had a negative performance of 22.3% over the last six months. Despite this, four mutual funds are holding the stock with a total weight of 1.99% on their portfolios.

The company has a market cap of $1544.67 million, and the stock is trading with a price-earnings (P/E) ratio of 58.89 and a price-book ratio (P/B) of 2.16. The price of $13.55 is 31.76% below its 52-week high and 2.89% above its 52-week low. Over the last 10 years, it returned a loss of 26%. According to the DCF calculator, the company is overpriced by 323%.

Over the last five years, the company has reported a 13.10% growth in revenue and 22.40% growth in EPS, 23.80% EBITDA growth and 32.60% free cash flow growth.

The ROE of 3.58% is ranked lower than 56% of other competitors, and the ROA of 2.92% outperforms 50% of other companies in the Global Software - Application industry.

The company's largest shareholder among the gurus is Private Capital (Trades, Portfolio) with 2.29% of outstanding shares, followed by Simons with 1.2%, Mairs and Power (Trades, Portfolio) with 0.75% and Joel Greenblatt (Trades, Portfolio) with 0.46%.

Community Health Systems Inc. (CYH) had a negative performance of 34% over the last six months. Regardless, five mutual funds are holding the stock with a total weight of 0.25% on their portfolios.

The company has a market cap of $809.49 million, and the stock is trading with a forward P/E ratio of 8.18 and a P/B ratio of 0.46. The price of $7.12 is 67.59% below its 52-week high and 66.99% above its 52-week low. Over the last 10 years, it returned a loss of 78%.

Over the last five years, the company reported revenue growth of 5.10% and EBITDA growth of 2.70%. EPS declined 15.50%.

The ROE of -49.53% and ROA of -6.31% are ranked lower than 97% of other companies in the Global Medical Care industry.

Royce is the company's largest shareholder among the gurus with 1.66% of outstanding shares, followed by Paul Singer (Trades, Portfolio) with 1.61%, John Paulson (Trades, Portfolio) with 1.41%, Simons with 1.39% and Greenblatt with 0.55%.

Tenet Healthcare Corp. (THC) had a negative performance of 22.6% over the last six months. Despite this, six mutual funds are holding the stock with a total weight of 2.46% on their portfolios.

The company has a market cap of $1.94 billion, and the stock is trading with a forward P/E ratio of 9.51 and a P/B ratio of 3.69. The price of $19.48 is 44.16% below its 52-week high and 35.35% above its 52-week low. Over the last 10 years, it returned a loss of 36%.

Over the last five years, the company reported revenue growth of 27.40% and EBITDA growth of 22.60%.

Its current ROE of -33.13% and ROA of -0.88% are underperforming 94% of other companies in the Global Medical Care industry.

The company's largest shareholder among the gurus is Larry Robbins (Trades, Portfolio) with 17.95% of outstanding shares, followed by Singer with 1.5%, Simons with 1.33%, Michael Price (Trades, Portfolio) with 0.25%, Jones with 0.02% and George Soros (Trades, Portfolio) with 0.01%.

Darling Ingredients Inc. (DAR) had a negative performance of 11.2% over the last six months. Regardless, four mutual funds are holding the stock with a total weight of 5.92% on their portfolios.

The company has a market cap of $2.08 billion, and the stock is trading with a P/E ratio of 14.15 and a forward P/E ratio of 16.29. The price of $12.61 is 20.78% below its 52-week high and 55.04% above its 52-week low. Over the last 10 years, it returned a gain of 128%. According to the DCF calculator, the company is undervalued with a 20% margin of safety.

Over the last five years, Darling Ingredients reported revenue growth of 17.30% and EBITDA growth of 10.10%. EPS, however, declined 12.50% and free cash flow decreased 10.10%.

The ROE of 7.65% is ranked lower than 70% of other competitors. The ROA of 3.02% outperforms 61% of other companies in its industry.

Ken Fisher (Trades, Portfolio) is the company's largest shareholder among the gurus with 1.26% of outstanding shares, followed by Mario Cibelli (Trades, Portfolio) with 0.65%, Barrow, Hanley, Mewhinney & Strauss with 0.21% and Simons with 0.19%.

JC Penney Co Inc. (JCP) had a negative performance of 37% over the last six months. Despite this, four mutual funds are holding the stock with a total weight of 1.02% on their portfolios.

The company has a market cap of $2.15 billion, and the stock is trading with a forward P/E ratio of 12.79. The price of $6.98 is 42.20% below its 52-week high and 9.13% above its 52-week low. Over the last 10 years, it returned a loss of 92%.

Over the last five years, JC Penney has reported a 13.90% decrease in revenue.

Current returns are negative and underperform 90% of other companies in the Global Department Stores industry. The ROE is -24.99% and the ROA is -3.36%.

The company's largest shareholder among the gurus is Simons with 3.51% of outstanding shares, followed by David Tepper (Trades, Portfolio) with 1.65%, Ray Dalio (Trades, Portfolio) with 0.52% and Royce with 0.47%.

Armstrong World Industries Inc. (AWI) had a negative performance of 10.2% over the last six months. Regardless, four mutual funds are holding the stock with a total weight of 7.73% on their portfolios.

The company has a market cap of $2.25 billion, and the stock is trading with a P/E ratio of 35.73 and a forward P/E ratio of 16.29. The price of $40.75 is 16.67% below its 52-week high and 11.62% above its 52-week low. Over the last 10 years, it returned a loss of 11%. According to the DCF calculator, the company is overpriced by 195%.

Over the last five years, the company reported a loss of 0.60% for revenue, but a 3.90% growth in EBITDA and 19% growth in EPS.

The ROE of 11.46% is ranked higher than 67% of other competitors. The ROA of 2.79% underperforms 54% of other companies in the Global Building Materials industry.

Jeff Ubben (Trades, Portfolio) is the company's largest shareholder among the gurus with 16.67% of outstanding shares, followed by Eric Mindich (Trades, Portfolio) with 4.19%, Chase Coleman (Trades, Portfolio) with 2.77% and First Eagle Investment (Trades, Portfolio) with 2.14%.

Disclosure: I do not own any shares of any stocks mentioned in this article.

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This article first appeared on GuruFocus.