10 Worst-Performing S&P 500 Stocks of 2011

BOSTON (TheStreet) -- The S&P 500 Index, the benchmark for U.S. stocks, is rising for a third consecutive year after a recession decimated corporate profits in 2008 and 2009.

But, some stocks are languishing, as their businesses are dogged by weaker demand from customers, higher energy prices or special circumstances.

10 Best-Performing S&P 500 Stocks of 2011

The S&P 500 has fallen from a high of 1,343 on Feb. 18. Uprisings in the Middle East and an earthquake and ensuing nuclear calamity in Japan prompted the sell-off. Still, the stock market has regained a firmer footing in the past week, as investors were pleased by improvement in the U.S. job market.

Top-Performing Energy Stocks Picked by Funds

The following 10 S&P 500 stocks, the worst of 2011 so far, have fallen fast. Each has been hurt by a turn in sentiment related to business prospects. For opportunistic buyers, these equities may offer value.

10. Carnival ( CCL) owns and operates cruise lines, including Princess and Holland American. Its stock soared 46% in 2010, but is down 16% this year.

Adjusted fiscal first-quarter earnings increased 58% to 19 cents, matching the consensus estimate, as sales gained 10%. But, the stock tumbled nearly 5% in reaction to the report as management signaled that revenue would be lower than expected in 2011. Also, higher fuel costs hampered profit growth. A higher gasoline price not only raises Carnival's operating costs, but also deters Americans from taking vacations, as they have less discretionary income.

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9. Urban Outfitters ( URBN) is a specialty retailer, selling clothing at its flagship stores and at its Anthropologie and Free People branded outlets. Urban's stock rose just 2% in 2010, underperforming indices, but it fluctuated wildly over that 12-month span. It has fallen 16% so far in 2011.

The company's adjusted fiscal fourth-quarter earnings were flat, year-over-year, at 45 cents, missing researchers' consensus by 13%, sending the shares down 17% in reaction to the report. Then, sell-side firms, including Jefferies and FBR Capital Markets, cut their price targets on the stock, exacerbating pessimism. It trades at a forward earnings multiple of 15, on par with specialty retail peers.


8. Target ( TGT) is a multi-line retailer, selling clothing, food and household items. Target's stock advanced 24% in 2010, but has fallen 17% this year.

Its adjusted fiscal fourth-quarter earnings increased 11% to $1.38, narrowly missing consensus, as sales inched up 2.4%. Last week, William Blair, voicing the criticism of many analysts, downgraded Target to "market perform." Also, Credit Suisse lowered its target for the stock, citing a slowdown.

Same-store sales, the key metric for retailers, fell 2.5% in 2010. Given the rise in gasoline prices, discounters like Target may see a drop in same-store sales as consumers retrench. Its stock sells for 11-times forward earnings, an attractive 46% industry discount.

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7. Akamai Technologies ( AKAM) provides software that accelerates the delivery of content and applications on the Internet. Its stock soared 87% in 2010, but has dropped 18% this year, underperforming technology benchmarks.

Akamai's adjusted fourth-quarter earnings decreased 23% to 40 cents, but beat the consensus estimate by 4.4%, as sales matched analysts' target. Akamai's stock plummeted 15% in reaction to the report. Investors were dismayed by lower-than-anticipated sales guidance for the first quarter. Akamai ranked among the best-performing S&P 500 stocks in 2010 and is still a tad pricey, costing 20-times forward earnings, a sizable growth premium.


6. Hudson City Bancorp ( HCBK) is a consumer-oriented savings, mortgage and consumer loan bank, based in New Jersey. Its stock dropped 7% in 2010 and has now fallen 23% in 2011, lagging the S&P 500.

Hudson's adjusted fourth-quarter earnings decreased 11% to 25 cents, beating analysts' consensus by 13%, as sales fell 5.8%. The stock dropped 9%, following the release. Non-performing loans rose from 2% to 2.8%, year-over-year, and the provision for losses remained steady at $45 million, signaling weakness in core businesses. Investors expecting balance sheet repair and dividend increases were discouraged. But, Hudson sells for a forward earnings multiple of just 11, a 57% peer discount, and yields 6%, to boot.

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5. RadioShack ( RSH) owns electronics stores and kiosks, selling mobile devices and accessories.

Its stock dropped 5% in 2010 and is down 23% this year. Adjusted fourth-quarter earnings fell 15% to 52 cents, missing the consensus estimate by 1.5%, as sales stretched 3.8%. RadioShack's stock tumbled before its quarterly report when management provided guidance below expectations. The departure of CEO Julian Day has cast doubt on the turnaround story.

The stock is notably cheap, trading at a forward earnings multiple of 8.3 and a book value multiple of 1.8, 52% and 44% peer discounts. It receives "buy" ratings from 28% of analysts in coverage.


4. Tellabs ( TLAB) designs equipment for communications service providers.

The company's stock appreciated 19% in 2010, but has dropped 24% in 2011. Tellabs' adjusted fourth-quarter profit tumbled to two cents, missing analysts' consensus by 76%, as sales grew 5.5%. Tellabs was unprofitable on a GAAP basis. Its stock fell 19% in reaction to the quarterly report. The stock was then downgraded to "sell" by Standard & Poor's.

Tellabs has questionable growth prospects. Its sales have dropped 5% a year since 2008. But, it is inexpensive based on book value and cash flow, offering peer discounts of 64% and 70%, respectively. Just 9% of researchers rate it "buy" as business is expected to decline.

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3. AIG ( AIG), still majority-owned by the U.S. government, is a diversified insurance company. After requiring billions of capital injections amid the financial crisis, AIG is still worst off of the beleaguered firms, with other TARP recipients like Citigroup ( C) and Bank of America ( BAC) having paid back government loans and returned to profitability.

AIG's stock rocketed 91% in 2010 as the company sold off non-core assets and posted profits in the first two quarters. Still, it's down 37% in 2011. AIG's adjusted fourth-quarter loss increased 69%, but beat consensus by 21%. The company is set to buy back high-yielding bonds from the Federal Reserve. As a result, its stock may benefit in coming weeks.


2. F5 Networks ( FFIV) makes hardware and software to improve the performance and security of servers and data-storage devices. Part of the cloud-computing movement, it was a beloved growth stock in 2010, more than doubling. It's down 27% in 2011.

F5's adjusted fourth-quarter earnings beat consensus by 6.4%, but its stock dropped 21% as management provided poor guidance. Goldman Sachs recently reiterated its "sell" rating on the stock, forecasting lower server sales in the year ahead and a slowdown in F5's growth rate. Costing 24-times cash flow and 8-times book value, F5 is priced for rapid expansion. It receives "buy" ratings from 53% of analysts in coverage.

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1. Monster ( MWW) runs employment sites, generating sales through advertising and fees. Many investors, expecting a traditional rebound in hiring, purchased Monster's stock, a direct beneficiary. But, unemployment is proving to be a structural, rather than cyclical, problem and Monster's business has been improving only modestly in 2011.

It swung to an adjusted fourth-quarter profit of 6 cents a share from a year-earlier loss, but missed consensus by 6.3%. Sales jumped 20%, however. Monster purchased HotJobs from Yahoo! ( YHOO) in 2010, but its outlook remains lackluster. It costs 19-times forward earnings -- no screaming bargain. It receives "buy" ratings from 44% of analysts.

-- Written by Jake Lynch in Boston.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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