You don’t have to wait any longer for a great crash to arrive. Some S&P 500 stocks are already in a world of hurt.
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Beating The Market: How To Find Outperforming Stocks
Twelve stocks in the S&P 500, including Walgreens Boots Alliance (WBA), Dexcom (DXCM) and Super Micro Computer (SMCI), have already crashed 40% or more from their 52-week highs, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge. A 40% decline is at least what it would take for the S&P 500’s valuation to return to long-term averages, based on CAPE yields (a long-term expected returns gauge).
“The extended valuations in the (tech) sector, and the general excitement around a new and unproven technology is more than enough to justify late 1990s dot-com bubble comparisons,” said Ross Mayfield, investment strategy analyst at Baird Private Wealth Management.
Pain In AI
Enthusiasm over the future of AI is a big reason for the S&P 500 rallying more than 15% this year. But there are signs of the mania cooling off.
The best example of investors pulling back on AI is Super Micro Computer. Shares of the maker of high-performance computing systems is down a staggering 41% from its 52-week high of 1,229 a share on March 8.
There’s nothing wrong with the company’s fundamentals. The stock sports a perfect 99 Composite Rating thanks to its 99 EPS Rating and 96 Relative Strength Rating.
Additionally, analysts think the company’s profit per share this year will more than double to $23.86. But investors simply got too bullish in the first quarter. Even after the crash, the stock still trades for 38 times its trailing adjusted earnings. That’s nearly 70% higher than its average P/E the past five years.
Biggest S&P 500 Busts
The crash of Super Micro Computer might be the most surprising among the S&P 500, but it’s not the most severe.
Shares of ailing drugstore Walgreens Boots Alliance are the hardest hit in the market. The stock is down a crushing 62% from its 52-week high of 31.32 on July 27, 2023.
The company is struggling to compete with online rivals for prescriptions. The stock’s crash is only the start of its problems. Analysts think its earnings per share will tank 28% this year to $2.85. It already has the lowest possible Composite Rating of 1 due to its low EPS Rating of 33 and Relative Strength Rating of just 4.
There’s a similar implosion at chemical firm Albemarle (ALB). The stock is down 57% from its 52-week high. And don’t expect fundamentals to bail it out. The company’s earnings are seen dropping nearly 90% this year to $2.47 a share. It already has a Composite Rating of only 22 and EPS Rating of 43.
Of course, it’s impossible to know when the S&P 500 itself will crash next. Stocks can remain overvalued versus historical averages for a long time.
But if you own any of these stocks, the crash is here now.
S&P 500 Stocks That Already Crashed
They’re down 40% or more from 52-week highs
| Company | Ticker | % ch. From hi | 52-week high date | Sector |
|---|---|---|---|---|
| Walgreens Boots Alliance | (WBA) | -62.5% | 7/27/2023 | Consumer Staples |
| Albemarle | (ALB) | -57.0% | 7/31/2023 | Materials |
| Paycom Software | (PAYC) | -56.7% | 7/31/2023 | Industrials |
| Dexcom | (DXCM) | -55.4% | 3/26/2024 | Health Care |
| Lululemon Athletica | (LULU) | -51.2% | 12/29/2023 | Consumer Discretionary |
| Lamb Weston Holdings | (LW) | -49.9% | 1/4/2024 | Consumer Staples |
| Align Technology | (ALGN) | -46.3% | 7/27/2023 | Health Care |
| Estee Lauder | (EL) | -45.2% | 7/31/2023 | Consumer Staples |
| Warner Bros. Discovery | (WBD) | -43.9% | 8/9/2023 | Communication Services |
| Caesars Entertainment | (CZR) | -42.1% | 7/27/2023 | Consumer Discretionary |
| Super Micro Computer | (SMCI) | -41.9% | 3/8/2024 | Information Technology |
| Nike | (NKE) | -41.3% | 12/20/2023 | Consumer Discretionary |
