13 Scariest Stocks of 2016

Daniel Banas  |

The nights have grown longer, the skies are gray, and the wind whistles eerily through the trees. It’s enough to send a shiver down your spine… which is precisely as it should be. After all, it’s Halloween!

This evening we celebrate the most macabre night of the year with a perennial favorite holiday for those who like their fun mixed with a hefty dose of fright. Of course, in the volatile world of Wall Street, you don’t have to wait until October 31st to have yourself a good scare - you need only to see your portfolio take a tumble after investing in the wrong stocks at the wrong time. Unfortunately, these scares aren’t of the “spooky smiling jack-o-lantern” variety, but are more of the existential “At this rate, how will I ever retire?” variety.

Point being, if you can avoid troubled stocks, you should, and the good news is… you can! Granted, there’s no sure thing in investing, but you can learn a lot about what to avoid when by looking at patterns, ultimately saving yourself a good deal of uncertainty and fear.

So, in the spirit (yes, spirit) of the season, here are this year’s 13 scariest stocks. Who knows? Perhaps after tumbling, some of them are undervalued options to invest in… IF YOU DARE…

1. Vertex Pharmaceuticals, Inc. (VRTX) (-39.73%)

2. Perrigo Company plc. (PRGO) (-36.84%)

3. Regeneron Pharmaceuticals, Inc. (REGN) (-32.70%)

Players in the pharmaceutical industry have looked a lot like campers at Crystal Lake this year, as one after the other has been mercilessly gutted. Case in point: Numbers 1), 2), and 3) on our list: Vertex Pharmaceuticals, Inc., Perrigo Company plc., and Regeneron Pharmaceuticals, Inc.

Vertex currently holds the dubious distinction of seeing the year’s biggest drop of any company on the S&P 500 with a market cap between $10 and $20 billion - a drop that currently hovers a shade under 40%. Perrigo, meanwhile, is only a razor’s edge away, having seen a drop nearing 37% for 2016.

Regeneron, meanwhile, is faring slightly less dire… though a 32.70% drop is certainly not doing investors any favors. Point being, if you see any uptick in Vertex, Perrigo or Regeneron in the near future, it’s probably because of its investors buying up their own company’s antidepressants.

4. Royal Caribbean Cruises Ltd. (RCL) (-31.63%)

Royal Caribbean Cruises is a great choice for investors looking to get away from it all, especially if they’re looking to get away from their hard-earned cash. Royal Caribbean has had a rough year, having sunk 31.63% since January 1st.

Royal Caribbean has actually shown signs of life over the past few days, as the stock rose nearly 9.5% on Q3 earnings Friday. Let’s hope this isn’t a Pet Sematary situation.

Remember those poor pharma companies we mentioned earlier? The contagion has spread, with four more pharma and bio companies, each with drops between 32% and 27%:

5. Alexion Pharmaceuticals, Inc. (ALXN) (-31.13%)

6. Mylan NV (MYL) (-29.80%)

7. Allergan plc (AGN) (-29.11%)

8. Illumina Inc. (ILMN) (-27.43%)

And yes, number six on the list happens to be Mylan N.V., aka “Home of the EpiPen scandal.” Incidentally, a number of analysts are beginning to issue a “Buy” rating for Mylan, suggesting the EpiPen terror is finally dead. However, that’s what they said about Michael Myers. Meanwhile, here we are, a dozen sequels later...

9. Alliance Data Systems Corporation (ADS) (-26.76%)

These days, it seems all we hear about is the importance of data analytics and marketing. Yet, here’s Alliance Data Systems Corporation, going against the grain by dropping 26.76% YTD in a rapidly growing field. Is this some kind of mad, misunderstood genius? Perhaps not; a recent Q3 earnings beat wasn’t enough to spark life into this data and marketing solutions corpse.

10. Kroger Co (KR) (-25.13%)

Like the Torrance family serenely driving through the Rocky Mountains toward their winter home at The Overlook Hotel, Kroger investors started 2016 blissfully naive of what horrors lay ahead… like a 24% YTD drop in value. Throughout the year, many analysts have seen glimmers of hope, but alas, they’ve all panned out just as effectively as groundskeeper Dick Halloran’s psychic rescue attempt.

11. Gilead Sciences Inc. (GILD) (-23.82%)

Considering it’s in the biopharma sector, is Gilead Sciences 23.82% YTD drop really that bad? Well, yes. Yes it is. But hey, better to be in the seventh circle of hell than the ninth, right?

12. Delphi Automotive PLC (DLPH) (-23.80%)

U.K.-based automotive parts manufacturer Delphi Automotive PLC is the world’s largest auto parts manufacturer, so it’s 23.80% drop in 2016 is perhaps not a particularly positive statement on the auto market in general. However, as of late, Delphi seems to be conjuring a comeback. Investing now could be a treat for investors… or it could leave their portfolios egged and toilet-papered… metaphorically speaking.

13. Chipotle (CMG) (-23.19%)

And the 13th spooky stock this Halloween? Chipotle Mexican Grill, Inc., with a terrifying tumble of 23.19% YTD. Turns out, the ghosts of Chipotle’s past just won’t stay dead. In fact, if you listen closely, you can still hear it on the wind E. Collllli….

Oh, and one more piece of advice - Despite any uptick you’ve seen this month, I’d recommend against making any rash investment moves into candy apple futures. Something tells me they might have peaked for 2016…

Happy Halloween!

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


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Companies

Symbol Name Price Change % Volume
CMG Chipotle Mexican Grill Inc. 937.25 9.69 1.04 15,554 Trade
KR Kroger Company (The) 29.74 0.03 0.10 558,285 Trade
RCL Royal Caribbean Cruises Ltd. 111.86 0.45 0.40 94,335 Trade
PRGO Perrigo Company plc 58.75 -0.20 -0.34 25,979 Trade
REGN Regeneron Pharmaceuticals Inc. 400.57 2.92 0.73 19,177 Trade
VRTX Vertex Pharmaceuticals Incorporated 247.81 1.88 0.76 47,290 Trade
ADS Alliance Data Systems Corporation 100.19 -0.31 -0.31 18,554 Trade

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