Now that 2018 has reminded investors just how volatile the stock market can be at times, it’s important to look at the big picture. The selling pressure of October has rattled even some of the largest bulls on Wall Street. It’s also important to consider that this current bull market is now over nine and a half years old, and it’s very possible the selling pressure can continue.
Fear and greed are the two driving forces when it comes to the decision of whether to buy or sell a stock. When the markets are screaming higher, as we have seen frequently over the past few years, many investors said that they just couldn’t wait to get an opportunity to buy some of their favorite companies of the bull market — if they would just dare pull back 20% or 25%. That has happened as a result of October’s major selling, and then some!
The undeniable problem investors run into is that when the pullbacks finally arrive, most investors become paralyzed by fear. That has been the case in October of 2018, even though many stocks seem as though they are pricing in the death of growth in their business and in the economy. Slowing growth, trade war fears, midterm elections, rising interest rates and unwinding of the great growth names, and a few dozen other issues, have sent the bull market into correction mode. At what point does selling pressure overshoot on the downside?
After a Finviz review on Monday, there were a whopping 225 members of the S&P 500 that have sold off by 20% or more from their 52-week highs. And to make matters worse, almost 20% of the S&P 500 stocks were down 30% or more from those highs. These losses are astronomical when you consider that as of Monday’s close the S&P 500 and Dow Jones industrial average were down 10.2% and 9.3% from their respective 52-week and all-time highs.
24/7 Wall St. has compiled a list of 25 great stocks that had been loved by investors during the major bull market but now have sold off 20% or more. With only one exception, the list cuts off at 40% because the technical damage done when companies lose that much value becomes too large for any bottom-fishing investor to trust. We also have screened out companies tied to autos, oil and gas, banking and financial services, and other troubled sectors that are littered full of major losses so far in 2018.
The reality is that nobody can keep picking absolute bottoms. And please understand that investors should never plow in all at once trying to catch the proverbial falling knife. Just because stocks start looking oversold or like great values does not in any way mean that the market cannot drag these shares even lower. That said, these are all great companies that investors have wanted to own during the great bull run.
Here are 25 of the solid bull market stocks that were down at least 20% from their 52-week highs as of October 29, 2018. The exact drop may have changed due to Monday’s selling, but this was how much each was down from their 52-week when the report was compiled. Additional color has been added on each.
Lowe’s Companies Inc. (NYSE: LOW) was last seen trading at $92.86, down over 21% from its 52-week high of $117.70. Its current market cap is $75 billion, and its new share price comes with a dividend yield of 2.1%. A slowing in housing trends and an underperformance on metrics versus Home Depot has led Lowe’s lower. The company has not issued end-of-the-world guidance, and analysts are still looking for earnings and revenue growth in 2018 and 2019.
Intel Corp. (NASDAQ: INTC) was last seen trading at $45.40, down over 21% from its 52-week high of $57.60. Its current market cap is $207 billion, and its new share price comes with a dividend yield of 2.6%. Intel has suffered with the major chip stocks, albeit not as much as many peers. The Dow stock actually maintained strong guidance for the remainder of 2018, and being a little over 10 times expected earnings doesn’t exactly sound too bad for the world’s top processor company.
United Parcel Service Inc. (NYSE: UPS) was last seen trading at $105.07, down over 22% from its 52-week high of $135.53. Its current market cap is $90 billion, and its new share price comes with a dividend yield of 3.5%. UPS shares peaked in the very few first days of 2018, and things were actually lower than here back in March for what has been one of America’s top transporter of goods.
Sherwin-Williams Co. (NYSE: SHW) was last seen trading at $366.76, down over 24% from its 52-week high of $479.64. Its current market cap is $34 billion, and its new share price comes with a dividend yield of 0.9%. The acquisition of Valspar was supposed to help solidify some markets for the top independent paint company, but it has fallen handily over the past month and technical damage is being done on its chart. Despite soft markets, analysts still see earnings growth coming down the pipe in 2018 and 2019.
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