The S&P 500’s sell-off in 2021 so far is getting uncomfortable for most. But look down just one layer, and you’ll see even more serious pain.
Fourteen stocks trading on the S&P 1500 index — including health care play Spectrum Pharmaceuticals (SPPI) and consumer discretionary stocks Sunrun (RUN) and GameStop (GME) — have crashed more than 70% from their 52-week highs, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
This means these stocks — which occupy the popular S&P 500, S&P SmallCap 600 or S&P Midcap 400 indexes — are erasing massive amounts of wealth.
And these stocks in major trouble highlight the massive gulf between the market’s winners and losers.
Small-cap growth stocks, which were responsible for big gains last year, are now squarely in a correction. They’re down more than 14% from their highs, as measured by the SPDR S&P 600 Small Cap Growth ETF (SLYG). The big-cap-dominated SPDR S&P 500 ETF Trust (SPY), on the other hand, is holding up slightly better: down 7.2%. But spared more still is the SPDR S&P 500 Value ETF (SPYV), off just 4.4% from its high.
“Equity markets have soared higher in 2021, based on an exceptionally strong economic rebound; however, according to a composite of our equity valuations, we think the market is 5% overvalued,” said Morningstar’s chief U.S. strategist, Dave Sekera said in a report published earlier this year.
Losers Are Sticking Out In The S&P 500
If you’re sitting on stocks that are down 70% or more from their highs, you’re definitely an outlier, in a bad way. And that’s saying something as the market’s carnage is now reaching more far and wide. The average S&P 1500 is down just 20% from a high.
It’s almost like a selling-switch got turned on in the beginning of the year. Over the last week of December and first week of January the number of S&P 500 stocks gaining outnumbered the number falling by the strongest amount since Oct. 8, 2020, says Bespoke Investment Group. “Most sectors’ current readings are through the roof and higher than most or any period observed in the past year,” Bespoke said.
So if you’re down this much, you’re feeling the other end of the market’s trend. Now nearly a half of S&P 1500 stocks are down 20% or more from their highs.
The Hardest-Hit Stocks
Scanning the hardest-hit stocks shows Spectrum Pharmaceuticals, a developer of oncology drugs, as the biggest loser. It’s down a bruising 86% from its 52-week high notched on June 14 of last year. In just a year’s time, the stock is down nearly 83%. During that time, the S&P 500 is up more than 15%.
The company’s fundamentals are weighing it down. Analyst think the company will lose another 59 cents a share in 2022. And even for last year, the company is expected to post a loss of 98 cents a share. Such chronic money-losing companies are now out of style with investors.
Meme Stocks Are Hurting In A Bad Way
The so-called “meme stocks,” are suffering too. Former highflier GameStop has seen shares plunge more than 71% from their 52-week high on March 10, 2021. Amazingly, though, the stock is still up more than 85% in the past 12 months. That gain, though, is vanishing fast.
The meme implosion has even touched the S&P 500. While not a single S&P 500 stock is down 70% from its high, ViacomCBS (VIAC) is close. It’s down nearly 68% from its meme-induced high set on March 15, 2021.
It’s unclear if these big losers portend more trouble for the S&P 500. But it’s clear now that the market has plenty of pain under the surface.
S&P 1500 stocks down 70% or more from their 52-week highs
|Company||Ticker||Index||Date of 52-week high||% change from 52-week high||Sector|
|Spectrum Pharmaceuticals||(SPPI)||S&P 600||6/14/2021||-85.7%||Health Care|
|Tabula Rasa HealthCare||(TRHC)||S&P 600||2/8/2021||-85.5%||Health Care|
|Proto Labs||(PRLB)||S&P 600||2/8/2021||-79.3%||Industrials|
|Tactile Systems Technology||(TCMD)||S&P 600||2/10/2021||-77.2%||Health Care|
|The Pennant Group||(PNTG)||S&P 600||2/19/2021||-76.6%||Health Care|
|Loyalty Ventures||(LYLT)||S&P 600||11/4/2021||-75.8%||Communication Services|
|Endo International||(ENDP)||S&P 600||2/18/2021||-72.6%||Health Care|
|GameStop||(GME)||S&P 400||3/10/2021||-71.5%||Consumer Discretionary|
|Organogenesis Holdings||(ORGO)||S&P 600||4/9/2021||-71.1%||Health Care|
|WW International||(WW)||S&P 600||6/8/2021||-70.8%||Consumer Discretionary|
|SunPower||(SPWR)||S&P 400||2/11/2021||-70.1%||Information Technology|
Source: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
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