Few investors can hit all the year's best S&P 500 stocks. But some were unlucky enough to own big stakes of the worst — and that's saying something this year.
Five investors — ETF and mutual fund giants BlackRock and Vanguard plus smaller investors Invesco, Bandera Partners and Artal Group — are the top holders of the 10 worst S&P 1500 stocks this year, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
And in a year like this one, when the S&P 500 is down roughly 19%, that really stings. All the worst stocks this year — like Logistics Properties, LendingTree and Diebold Nixdorf — are down more than 75%.
Losing Money Was Easy This Year
Avoiding losing stocks was very difficult this year.
Every stock owned by ARK Innovation, the popular ETF run by Cathie Wood, is down this year. And nearly 75% of the stocks in the S&P 1500 index, which includes the giants in the S&P 500, fell in 2022.
This year is turning into one for the record books, in a bad way, following the drop on Dec. 16. "Well, 2022 you've finally done it," said Bespoke Investment Group. "If there was any doubt about how bad of a year it has been, today's decline in the S&P 500 will move 2022 into the lead for the largest number of 1% declines to close out the trading week going back to 1952, when the NYSE started the current five-trading day workweek."
But it's been worse for some investors than others.
The Unluckiest Investor: BlackRock
One investor was in the wrong place at the wrong time more than any other: BlackRock.
The giant ETF and mutual fund manager was the No. 1 owner of six of the 10 worst S&P 1500 stocks this year. Its biggest miss was online mortgage marketplace LendingTree, which dropped 84% this year. BlackRock owns more than 18% of the company. That's even more than the company's founder, Doug Lebda, who is the No. 2 holder with 13.6% of the company.
Part of BlackRock's big ownership of so many losing stocks is due to its enormous size. The firm controls more than $329 billion in total net assets, says Morningstar Direct. Many of its investment strategies, too, are dictated by indexes.
But what is strange is that BlackRock is a No. 1 holder of more of the worst stocks than Vanguard, which runs $4.5 trillion in total net assets. Vanguard is the No. 1 owner of just one of the worst S&P 500 stocks this year. Albeit, Vanguard is the No. 1 holder of the year's absolutely worst stock: Industrial Logistics, down 85.3%.
Going In Big On Sinking Stocks
What hurts more than owning a collapsing stock? Owning a huge slice of one.
And that's the situation for Artal Group, a Luxembourg-based investor holding a 21% position of weight management program operator WW International. Shares of the company, known better as Weight Watchers, are down more than 76% this year. The stock is struggling as its adjusted profit per share is seen plunging in half this year.
In a year where winning stocks were hard to find, avoiding the big blowups is an accomplishment in itself.
Top Investors In Year's Worst Stocks
No. 1 holders of S&P 1500 stocks down the most this year
| Company | Symbol | Year-to-date change | Top owner | Ownership |
|---|---|---|---|---|
| Industrial Logistics Properties Trust | -85.3% | Vanguard | 16.6% | |
| LendingTree | -83.6% | BlackRock | 18.20% | |
| Diebold Nixdorf | -80.9% | BlackRock | 14.2% | |
| Nektar Therapeutics | -80.3% | Invesco | 19.4% | |
| Bed Bath & Beyond | -79.6% | BlackRock | 9.8% | |
| The Joint | -77.0% | Bandera Partners | 16.99% | |
| Diversified Healthcare Trust | -77.0% | BlackRock | 16.8% | |
| Unisys | -76.6% | BlackRock | 16.5% | |
| WW International | -76.3% | Artal Group | 21.0% | |
| Cerence | -76.1% | BlackRock | 16.7% |
Sources: S&P Global Market Intelligence, IBD
Follow Matt Krantz on Twitter @mattkrantz
