The stock market smashed record after record in 2014. Apparently these stocks didn’t get the memo.
1. Drilling stocks
Ticker: RIG, NE, ESV, NBR, DO
2014 performance: -38% to -67%
Drilling stocks are drowning — in a sea of $55 oil.
When oil was trading solidly in triple-digit territory, life was good for drillers. Big Oil companies were willing to shell out big bucks on drilling projects, even in difficult environments like the Arctic and deep in the Gulf of Mexico.
But now that oil has plunged 40% in just months, this corner of the stock market — more than any other — is feeling the pain.
As oil companies scale back on capital spending, that translates to diminished revenue for drillers. As a result, these companies are forced to cut dividends, abandon share buyback programs and slash their own spending plans.
Just look at Transocean. The stock is down 67% this year, making it the worst performer on the S&P 500. It’s trading at levels unseen since 1995 and is the most heavily shorted energy stock in the index, according to Markit.
Transocean isn’t alone. Rival drillers Noble, Ensco, Nabors Industries and Diamond Offshore are all down by more than a third this year.
2. Energy exploration & production stocks
Ticker: DNR, QEP, RRC, NBL, FCX, JEC, APA
2014 performance: -34% to -61%
The high-risk/high-reward nature of the energy exploration and production industry has been on full display at the end of this year.
For example, as oil prices raced higher back in 2009 and 2010, Denbury Resources was a high-flying stock. But like other E&P companies, Denbury has been in free fall due to nosediving oil prices.
Last month, Denbury warned it’s halving capital spending, dialing back dividend growth and saying goodbye to a pair of high-ranking executives. It’s the second worst performer in the S&P 500 this year.
Other beaten-down E&P companies include QEP Resources, Apache and Range Resources. The pain has also spread to Jacobs Engineering, a construction services firm that helps build oil and gas facilities.
Another big 2014 loser in this space is Freeport McMoRan, the natural resources company that recently diversified beyond metals through two oil and gas acquisitions. Now those deals look poorly-timed, to say the least.
3. Genworth Financial
Ticker: GNW
2014 performance: -50%
Insurance companies are known as relatively boring stocks to own, but don’t tell that to Genworth Financial investors.
They’re probably still trying to catch their breath from a 38% plunge the insurer’s stock took in a single day in November.
That meltdown was fueled by Genworth Financial’s alarming third-quarter loss of $844 million. It was caused by Genworth underpricing many of its offerings for long-term care insurance, which helps pay for nursing-home and home-based health care.
As if those losses weren’t enough, Standard & Poor’s followed suit by downgrading Genworth’s credit rating into junk territory.
4. Avon Products
Ticker: AVP
2014 performance: -47%
Here’s how bad things have gotten at Avon: It’s trading in single-digit territory for the first time since Derek Jeter won Rookie of the Year. Yes, that Derek Jeter. The one who retired in September after an 18-year career with the Yankees.
So what happened to Avon, which traded at $40 in 2008?
A six-year bribery probe definitely didn’t help. Avon agreed to pay $135 million to settle the charges earlier this year and spent over $300 million to investigate itself.
Avon’s underlying business looks pretty ugly too. The company has been hurt by sluggish sales and is struggling to attract and hold onto sales reps.
The world’s largest direct seller of cosmetics was dealt another setback last month when Standard & Poor’s dropped Avon’s debt to junk status despite efforts to cut $400 million in costs by 2016.
5. Coach
Ticker: COH
2014 performance: -37.5%
The punishing handbag wars have left Coach with serious battle scars in recent years.
Coach (COH) has been bruised by fierce competition from Kate Spade and Michael Kors and missteps in its pricing strategy that have tarnished the brand.
After years of steady sales growth, Coach suffered a 5% drop in fiscal 2014 revenue amid struggles in North America.
Related: 6 ugly stocks that look sexy in 2015
That’s why Coach shares have underperformed the S&P 500 and its peer group each of the past three years, highlighted by a 37% plunge in 2014.
Management has responded by unveiling a slew of strategic changes, including boosting store capital spending, hiring a new designer, reducing promotions and growing the men’s brand.
However, Standard & Poor’s recently warned “negative sales trends and margin erosion will persist” in fiscal 2015. The timing on a turnaround “remains uncertain.”
6. Mattel
Ticker: MAT
2014 performance: -36%
Mattel is the misfit toy stock of Wall Street.
As CNNMoney previously reported, Mattel’s toy lineup just isn’t as cool as rival Hasbro’s.
Sales of Mattel’s Barbie and Fisher-Price brands have plunged in recent quarters and things are only likely to get worse.
Mattel recently lost out on a chance to renew a deal to sell Disney Princess toys to Hasbro in 2016. That ends a 20-year partnership for Mattel at a time of huge demand for anything related to Disney’s “Frozen” film.
Meanwhile, Hasbro already has deals in place that will allow it to capitalize on huge demand for anything related to the new Avengers and Star Wars films due out in 2015.
7. GameStop
Ticker: GME
2014 performance: -33%
The fun and games of 2013 have all vanished for GameStop investors.
Wall Street was downright giddy on the video-game retailer last year, driving its shares a whopping 96% higher.
Yet hopes that the rollout of PlayStation 4 and Xbox Live would translate to rapid growth for GameStop have failed to pan out.
Yes, hardware sales have surged. They more than doubled in the most recent quarter.
But GameStop has been hurt by a decline in sales of used games for older systems as well as competition from the likes of Walmart and other big-box stores.
Shares of GameStop plummeted late last month after the company revealed a surprise decline in sales and also issued a frosty outlook for the crucial holiday quarter.
