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The 5 Worst Performing S&P 500 Stocks of 2023: Is It Time to Buy?

Published 27/12/2023, 06:54 pm
Updated 02/09/2020, 04:05 pm
  • The S&P 500 is up 24.3% in 2023, on track for one of its best years in recent history.
  • Nonetheless, there were still some significant laggards that underperformed the benchmark index by a wide margin.
  • In this article, I take a look at the year’s biggest losers and examine their prospects on whether they can mount a comeback in 2024.
  • Looking to beat the market in 2024? Let our AI-powered ProPicks do the leg work for you, and never miss another bull market again. Learn More »
  • With just three trading days left in 2023, stocks on Wall Street are on track to end the year on an upbeat note with investors growing increasingly optimistic that the Federal Reserve is done with raising interest rates as inflation continues to cool.

    The S&P 500 is up 24.3% year-to-date heading into Wednesday’s trading session, its biggest annual gain in three years and the third-best yearly performance in the past decade.

    The benchmark index now stands less than 1% away from its all-time closing high reached in January 2022.S&P 500 Monthly Chart

    With Wall Street closing the curtains on a blockbuster year, the following five stocks have missed out on the rally and have seen their share price collapse in terms of year-to-date performance.

    Each of these companies faced unique challenges that contributed to their dismal performance, leaving investors wondering if these stocks could stage a comeback in 2024.

    1. FMC Corporation

    • 2023 Year-To-Date Loss: -48.9%
    • Market Cap: $7.9 Billion

    FMC Corporation (NYSE:FMC), a diversified chemical manufacturing company based in Philadelphia, struggled in 2023 due to a combination of supply chain disruptions, increased raw material costs, and weaker demand in some of its key markets.

    The ongoing global supply chain woes severely impacted the agricultural chemicals specialist's ability to deliver products efficiently, leading to reduced profit and revenues and a sharp decline in stock value.

    FMC stock - which sank to its lowest level in more than six-and-a-half years last month - has declined 48.9% in 2023, making it the worst performer on the S&P 500 this year.FMC InvestingPro Snapshot

    Source: InvestingPro

    While FMC has a strong and diversified chemical portfolio, its rebound in 2024 hinges on resolving lingering supply chain issues and adopting efficient production methods to reduce its cost structure.

    As InvestingPro points out, FMC stock is currently trading at a bargain valuation. Shares could see an increase of 27.3% from last night’s closing price of $63.76, which would bring them closer to their ‘Fair Value’ of $81.17.

    2. Enphase Energy

    • 2023 Year-To-Date Loss: -48.2%
    • Market Cap: $18.7 Billion

    Enphase Energy (NASDAQ:ENPH), a solar technology company with headquarters in Fremont, California, faced significant headwinds in 2023 due to concerns over lukewarm demand for its solar products and equipment as the current economic backdrop makes residential solar less attractive.

    Additionally, increased competition in the renewable energy sector and supply chain constraints hampered its growth prospects and pressured margins as well as its stock price.

    Shares of the solar power and energy storage systems manufacturer have significantly underperformed the broader market in 2023, falling 48.2% year-to-date to make Enphase the second-worst performer on the S&P 500 this year.Enphase InvestingPro Snapshot

    Source: InvestingPro

    Despite the long-term potential of renewable energy, Enphase Energy needs to navigate market challenges effectively to regain investor confidence in 2024.

    It should be noted that even after ENPH stock lost nearly half its value since the start of the year, shares remain significantly overvalued at the moment according to InvestingPro, and could see a decline of 17.5% from Tuesday’s closing price of $137.34.

    That would take the stock closer to its ‘Fair Value’ target of $113.32.

    3. Dollar General

    • 2023 Year-To-Date Loss: -46%
    • Market Cap: $29.2 Billion

    Dollar General (NYSE:DG), a retail powerhouse, faced formidable challenges in 2023 due to a confluence of factors, including sluggish consumer spending, elevated inflationary pressures, and supply chain disruptions affecting its inventory management.

    The Goodlettsville, Tennessee-based company also contended with the negative impact of the growing industry-wide trend of retail theft, or ‘shrink’, denting margins and investor confidence.

    Shares of the discount retailer - which recently slumped to their lowest since December 2018 - have lagged the year-to-date performance of the major indices by a wide margin in 2023, tumbling 46% to earn the dubious title of the third worst S&P 500 stock of the year.

    Dollar General InvestingPro Snapshot

    Strategic repositioning and adapting to changing consumer behaviors, such as expanding its fresh produce offerings and investing in digital capabilities, could pave the way for Dollar General's resurgence in 2024.

    It is worth mentioning that DG shares appear to be a tad overvalued, as per the quantitative model in InvestingPro, which points to a potential downside of 6.9% from current levels over the next 12 months to their ‘Fair Value’ estimate of $123.83.

    4. Moderna

    • 2023 Year-To-Date Loss: -45.8%
    • Market Cap: $37.1 Billion

    Pharmaceutical giant Moderna (NASDAQ:MRNA) witnessed a significant downturn in 2023 amid dwindling demand for its blockbuster Covid-19 vaccine - the biotech firm’s only marketable product.

    Furthermore, uncertainties surrounding stringent regulations affecting drug development and approval timelines added pressure to the vaccine maker’s stock value.

    MRNA began the year at $180.85 and fell to a 2023 low of $62.55 on November 2, a level not seen since September 2020.

    Shares ended at $97.33 yesterday, representing a year-to-date decline of 45.8% to make Moderna the fourth worst-performing stock in the S&P 500.Moderna InvestingPro Snapshot

    Source: InvestingPro

    Moderna’s recovery prospects in 2024 hinge on diversifying its product line into new therapeutic areas, advancing research initiatives in mRNA technology, and fortifying its position in the biopharmaceutical landscape.

    Despite its substantial year-to-date loss, it is worth mentioning that Moderna’s stock is still not cheap according to InvestingPro, and could see a decline of 17% in the next 12 months to its ‘Fair Value’ of $80.77.

    5. Pfizer

    • 2023 Year-To-Date Loss: -44.5%
    • Market Cap: $160.3 Billion

    Pfizer (NYSE:PFE), one of the world’s largest pharmaceutical companies, encountered challenges in 2023 linked to declining sales of its Covid-related product portfolio as well as increased regulatory scrutiny and pricing pressures on its blockbuster drugs.

    Additionally, patent expirations and competition from generic drug manufacturers strained revenue streams and dented margins.

    Shares fell to their lowest level since 2013 at $25.78 on December 13 and have underperformed the broader market by a wide margin in 2023, sinking 44.5% year-to-date. That makes Pfizer the fifth worst-performing stock on the S&P 500 in 2023.Pfizer InvestingPro Snapshot

    Source: InvestingPro

    Pfizer's success in developing new drugs in therapeutic areas beyond existing products and potential strategic acquisitions may be vital for its recovery in 2024.

    Indeed, PFE stock is substantially undervalued according to the quantitative models in InvestingPro: with a ‘Fair Value’ price target of $39.21, Pfizer shares could see an upside of 38% from current levels over the next 12 months.

    Be sure to check out InvestingPro to stay in sync with the market trend and what it means for your trading. As with any investment, it's crucial to research extensively before making any decisions.

    InvestingPro empowers investors to make informed decisions by providing a comprehensive analysis of undervalued stocks with the potential for significant upside in the market.

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    Disclosure: At the time of writing, I am long on the S&P 500, and the Nasdaq 100 via the SPDR S&P 500 ETF (SPY (NYSE:SPY)), and the Invesco QQQ Trust ETF (NASDAQ:QQQ). I am also long on the Technology Select Sector SPDR ETF (NYSE:XLK). I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies' financials. The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.

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