Investors scored big-time on the biggest S&P 500 stocks this year. But those who picked the wrong stocks suffered mightily.
Investors lost $462 billion holding just eight stocks dropping the most market value this year, including ailing vaccine maker Pfizer, struggling oil giant Chevron and Johnson & Johnson. Each of these stocks shed more than $30 billion apiece just this year — more than any other in the S&P 500, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
Such a division between the losers and winners is stark this year. "This year's excellent S&P 500 returns have been concentrated in just three Big Tech-heavy sectors," said Nick Colas of DataTrek Research.
The S&P 500 Have's Vs. The Have Nots
Suffering losses this year hurts all the more as the S&P 500 had such a good year. The S&P 500 itself jumped nearly 24%. That's more than twice the index's typical annual return.
And there were some huge gains. Both Microsoft and Apple each added nearly $1 trillion in market value in just one year. But the downside is almost equally impressive, but in the wrong direction.
Pfizer, which helped get the world back to work with its Covid-19 vaccine, is suffering now. The company overestimated how profitable the vaccine and other Covid treatments would be once the pandemic subsided. Shares of the company are down nearly 45% this year. That single-handedly knocked $129 billion off the company's market value.
And it's not just speculation. The company's fundamentals are falling off a cliff. Pfizer is only expected to make $1.53 a share on an adjusted basis this year. That's down more than 76% from 2022. And there's not much of a recovery coming. Analysts think the company will make $2.29 a share in 2024, up 49%. But the company's profit in 2027 is only expected to be less than half what it was in 2022.
The vaccine hangover is affecting Moderna, too. Shares of the mRNA leader are off 47% this year. That erased $32 billion in market value.
Rough Patch In S&P 500 Energy
This year was all about big-cap tech stocks. Investors wanted little to do with energy stocks.
The price of a barrel of oil this year sank more than 27% from its 52-week high to its 52-week low. And lacking strength in the price of the commodity, oil producers' stocks suffered, too.
Shares of Chevron sagged more than 15% this year. That decline knocked $54 billion in market value off the company. The company's profit is expected to drop 29% this year. And the next five years aren't looking great. Analysts think the company's profit in 2027 will be 31% lower than it was in 2022.
And again, the pain spread through the industry. Chevron's chief rival, Exxon Mobil, saw shares skid 7.6% this year. Given the size of the company, that loss subtracted more than $32 billion in market value this year.
Gearing Up For 2024
This year serves up another remind of the importance of cutting losses on your losing stocks before they get too big. This move can make a life-changing amount of difference.
Had an investor with a $10,000 portfolio sold Pfizer when it was down just 10% and switched to Microsoft stock, they'd be up roughly 46% rather than down 45%. Making the swap would leave the investor with $23,500 rather than just $5,500.
It's a good lesson to learn before 2024.
Biggest S&P 500 Market Value Losers
In 2023 year-to-date
| Company | Ticker | % ch. year-to-date | Market value loss ($ billion) | Sector |
|---|---|---|---|---|
| Pfizer | -44.6% | -$128.9 | Health Care | |
| Chevron | -15.9% | -$53.7 | Energy | |
| Johnson & Johnson | -12.0% | -$51.0 | Health Care | |
| NextEra Energy | -28.5% | -$48.9 | Utilities | |
| Bristol-Myers Squibb | -27.4% | -$40.1 | Health Care | |
| Estee Lauder | -41.8% | -$37.1 | Consumer Staples | |
| Exxon Mobil | -7.6% | -$33.5 | Energy | |
| Moderna | -47.2% | -$32.3 | Health Care |
