Image by: PublicDomainPictures
By Dexter Lunde
Some people have the worst luck. Sometimes, it’s not just people either, its companies and businesses. After a bit of digging, I’ve managed to find four of the unluckiest stocks on the market. How do I define “unlucky? The states that I have are based on losses within the last five to seven years. Most stocks fluctuate depending on what is going on in the news and economy. Bad news = flailing stock traders.
Let’s see which stocks did the most flailing in the past five years…
#1) Newpont Mining
When we had a stock market gold rush a couple years back (2009), the mining industry did wonderfully in the stock market. However, after gold peaked in 2011, everyone seems to have left the mining industry all together – at least, as far as the stock market is concerned. Traders have left metals in favor of other assets.
With most mining industry stocks, they have a tendency of following what gold does on the market. Their moves amplify what they do in contingency to what gold does on the market. Newmont Mining is no exception, especially when they are one of the world’s largest producers of gold. In fact, they have a tendency of raising and lowering their cash dividends depending strictly on what gold’s price is.
Over the last five years (that’s since the price of gold began to rise in 2009), they’ve lost a total of 32%. That’s about 7% per year. It may not look like much when I put it in those terms so let me put it to you this way. If you put in $10,000 back when gold began to rise, you’ll find yourself with a mere $6,800 today.
#2) Alpha Natural Resources
Coal isn’t doing so hot right now. In fact, last Christmas, there was a pitiful commercial done by a Texas coal company who changed the lyrics of “Frosty the Snowman” to “Frosty the Coalman”. If you didn’t catch it, you can find it here:
Anyway, coal’s not doing so great and Alpha Natural Resources (based out of Bristol, Va.) was no exception. Within the span of three years, their revenues took a nose dive from just over $7 billion to under $5 billion dollars. What were their total losses for those three years? $4.2 billion dollars in losses.
Since March 2009, they have lost nearly two thirds of their value. They’ve lost 67% in five years. Stock market gurus like John Paulson (a billionaire hedge-fund manager) finally gave up on them a couple years ago, sold his stake, and hasn’t looked back since.
#3) J.C. Penney
Poor J.C. Penney. I’ve been watching their decline for the past couple years. They’ve done everything, including hiring new CEOs (which was a disaster). The hiring of Ron Johnson was exciting. He was the creator of Apple’s storefronts after all. However, he did everything wrong for J.C. Penney, including eliminating markdowns. Really? Talk about driving away loyal customers.
They tried to fix their mistakes but it was too little, too late. At the beginning of this year, shares were at a 50-year low. My three year old nephew can buy one of J.C. Penney’s stocks from the nickels and dimes that he has in his piggy bank. Of course, I wouldn’t recommend that to the naïve boy.
However, the current CEO (Myron Ullman) isn’t a fair weather fan. He is insistent that the bad times are behind them all now. So (ignoring the 57% loss in the past five years), he suggests that we give the retail company another chance. You have to give him credit for staying with a (probably) sinking ship. But what can I say? I’m a sucker for an underdog bet.
#4) Leap
No, not LeapFrog (can’t you tell that I’ve got a three year old nephew?). Leap was a small time company in the big time game of wireless telecommunication. Notice that I said, “was”? They finally got bought out by AT&T for $15 a share. In cash. The deal is currently at $1.2 billion (it’s still waiting for approval from regulations though).
While that may not sound – too – bad for a small company that was getting eaten alive by bigger fish, the stock prices used to hover around $100 per share in 2007. However, every time they got ready to sell, they always ended up getting stood up. Until AT&T came in. Total loss for the past 5 years? 42%