Daily Press (Sunday)

Picking through the rubble of this year’s hardest-hit stocks

- John Dorfman

As each year draws to a close, I like to sift through the debris of the year’s worst-performing stocks.

Usually I can find one or two that strike me as bargains.

This year, among all U.S. stocks with a market value of $5 billion or more, the worst performers are:

Icahn Enterprise­s LP (IEP), down 62.9%.

Enphase Energy Inc. (ENPH), down 53.2%.

Moderna Inc. (MRNA), down 52.1%

FMC Corp. (FMC), down 51.4%.

Ubiquiti Inc. (UI), down 49.5%. I recommend two of these five big losers: Moderna and FMC.


Moderna burst from obscurity to instant fame with its highly successful COVID-19 vaccine. Well over 200 million doses of the vaccine have been administer­ed in the United States since the pandemic began in 2020.

Moderna’s revenue was $2.7 billion in the 12 months through December, but COVID vaccinatio­ns have been declining. In the September quarter, Modern’s revenue was $551 million, down 13% from a year earlier.

The company believes that its messenger-RNA technique can be applied to other diseases besides COVID-19, and that seems highly plausible to me. But this is a risky investment, given that Moderna has swung from a $20-a-share profit in fiscal 2022 to an estimated $10.72-a-share loss in fiscal 2023.


FMC Corp., with headquarte­rs in Philadelph­ia, makes chemicals to protect crops against insects, weeds and fungus. It also makes fertilizer.

FMC’s stock price is slightly below where it was a decade ago. This year, sales to Brazil and Argentina fell hard. Nonetheles­s, the company has shown a profit in each of the past 15 years.

It has a respectabl­e return on equity, nearly 15%. And it sells at a reasonable valuation — 15 times recent earnings and only 12 times the earnings that analysts project for 2024. Over the past decade, the average multiple was 22. I think the stock is undervalue­d.

Enphase Energy

After its big drop this year, Enphase Energy sells for about $124 a share, down from a high of $336 last year. Based in Fremont, California, the company makes microinver­ters, which are a key element of many solar-energy panels.

Microinver­ters convert direct current to alternatin­g current, which is used in most homes and commercial buildings. Enphase also makes batteries to store solar energy.

The company has grown its revenue at a 37% annual clip the past five years. Growth has continued this year but at a slower pace, which Enphase blamed on sluggish economies in Europe plus some weakness in the California market.

As a cheapskate value investor, I find Enphase too expensive at 31 times recent earnings. But I think that investors who are more willing to pay up for growth than I am should watch this stock closely. I view Enphase as a high-quality company.


Ubiquiti Inc., based in New York City, provides computer networking equipment and services, mostly to small and medium-sized businesses. Since 2020, the company’s liabilitie­s have exceeded its assets. That’s a situation that I prefer to avoid.

Icahn Enterprise­s

Financier Carl Icahn is the board chairman and major stockholde­r of this limited partnershi­p, which invests in a wide variety of companies, and often pushes for structural change at companies it views as underperfo­rmers.

Icahn Enterprise­s appears to be headed for its fifth unprofitab­le year in a row (based on reported earnings per share, fully diluted, and including nonrecurri­ng items). So I’m not tempted here, despite a sky-high dividend (part of which is return of investors’ capital).

The record

I’ve written 12 previous columns on the year’s biggest losers, and recommende­d a total of 24 stocks (from one to three each year). Those stocks have averaged a 25.1% return in the next year, which is nicely above the 15.8% average for the Standard & Poor’s 500 Total Return Index over the same periods.

So far, so good, but the results are mixed. Only six of my 12 sets of recommenda­tions in this series have been profitable. And only four have beaten the index. My results were helped by profits exceeding 100% on the recommenda­tions from 2012, 2015, 2016 and 2020.

Bear in mind that my column results are hypothetic­al and shouldn’t be confused with results I obtain for clients. Also, past performanc­e doesn’t predict the future.

A year ago, I recommende­d two stocks from among the year’s biggest disasters. Twilio Inc. (TWLO), a business-software company, did well, returning

64%. Lucid Group Inc. (LCID), an electric car maker, bombed, with a 34% loss.

Disclosure: I own Moderna for a few of my clients. A colleague at my firm owns FMC for his clients.

John Dorfman is chairman of Dorfman Value Investment­s

LLC in Boston, and a syndicated columnist. His firm or clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanval­ue.com.

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