THE S&P500 (INDEXSNP: ^GSPC) is home to some of the best and most promising stocks you can own in the markets. When stocks in this broad index go on sale, it could be a great time for investors to consider investing in it. Three S&P 500 stocks that have collapsed this year are catching the attention of bargain hunters: Walgreens Boot Alliance (NASDAQ:WBA), Boeing (NYSE:BA)And Intel (NASDAQ:INTC).
Let’s take a look at why these three S&P 500 stocks are struggling and whether you should consider adding them to your portfolio today.
1. Walgreens Boots Alliance: Down almost 31% year to date
Drugstore retailer Walgreens hasn’t been a bad investment this year alone; over the past five years, the stock has lost two-thirds of its value. There are plenty of reasons to be bearish on the stock. Not only has the company struggled to grow, but the company’s razor-thin margins make it difficult to turn a profit. Although it has diversified into the healthcare sector with the launch of primary care clinics through its investment in VillageMD, this will only put more pressure on the company and its resources in the future.
Earlier this year, the company cut its dividend in an effort to strengthen its financial position. The company is also rumored to be considering selling assets including its Boots UK pharmacies.
Over the past 12 months, the healthcare company suffered an operating loss of more than $2 billion. And with many challenges ahead, this is a stock I would avoid because things can still get worse for Walgreens, and there is no guarantee they will get better.
2.Boeing: Down almost 31% since the start of the year
Boeing has seen a decline almost identical to that of Walgreens this year. The reasons for his struggles also go back several years. Its planes face safety problems. In 2019, the Boeing 737 Max was temporarily grounded after being involved in several fatal crashes, and problems with the engines, wiring and flight control computer were reported. Earlier this year, the company made headlines again after a door flew off during a theft. It was later discovered that the bolts intended to hold the door in place were missing.
The big problem in business is trust. Rest assured that it can provide quality aircraft that airlines and passengers can rely on. Changes are coming to management with the resignation of CEO Dave Calhoun this year. If the company makes significant improvements to its quality control, then one can hope that it can regain the trust of all its stakeholders, including investors.
In the meantime, the company’s financial results are disappointing to say the least. In three of the last four quarters, Boeing posted an operating loss. Revenue for the first three months of 2024 fell 8% to $16.6 billion.
The company faces a tough road ahead, and with travel demand potentially slowing amid a recession, there are plenty of reasons why things could get even worse for Boeing. Investors might be better off taking a wait-and-see approach with the stock, as the risk surrounding Boeing makes it a bit too risky to invest in the company for now.
3. Intel: down 38% year to date
The worst-performing stock in the S&P 500 so far is Intel, with shares of the chipmaker down 38% this year. The technology company is positioning itself as a major player in manufacturing next-generation chips, but that is not enough to convince investors. CEO Pat Gelsinger says: âWe are one of two, maybe three, companies in the world that can continue to implement next-generation chip technologies. »
The problem is that generating these chips may not be easy, despite what is expected to be strong long-term demand. For the period ending March 30, Intel’s foundry revenue fell 10% year over year to $4.4 billion. And this business sector also suffered a loss of $2.5 billion.
Investors seem to doubt the technology company‘s ability to be a serious player in the next-generation chip space, given its disappointing financials. But of the three stocks listed here, Intel might be the most intriguing contrarian play due to the need for the United States to reduce its reliance on foreign chipmakers. The U.S. government has agreed to give Intel up to $8.5 billion in grants to help it increase chip production in the country, as well as an additional $11 billion in loans.
While Intel faces an uphill battle and is still a risky buy at the moment, it could be a good contrarian pick given the support it has from the government and the need for domestic chip manufacturing capabilities.
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls on Intel and short May 2024 $47 calls on Intel. The Mad Motley has a disclosure policy.
Is now the time to buy 3 of the worst performing stocks in the S&P 500? was originally published by The Motley Fool
