With tech seeing better days and disrupting newer industries, we look at the stocks that have underperformed in 2018. Yes, the markets have been choppy this year after a spectacular run in 2017. Concerns over trade war with China have escalated and negatively impacted several stocks. However, the S&P 500 is still up by over 7.5% this year. While some stocks might be trading at attractive valuations, investors need to be cautious while allocating funds to them.
Shares of Frontier Corp. have declined 21.3% in 2018 after falling 84% last year. The communication services firm has been struggling with declining sales with revenue expected to fall from $9.12 billion in fiscal 2017 to $8.59 billion in 2018, $8.2 billion in 2019 and $7.9 billion in 2020.
Frontier Corp. is expected to post a net loss of -$1.68 per share in 2018. The company continues to lose video subscribers due to the rapid growth of online streaming services. In Q2 2018, the company lost 40,000 video customers. Frontier also lost broadband customers in the last quarter driven by customer migration to larger cable operators. Although the average 12-month analyst price target for Frontier is 18% above its current price, investors should be cautious while investing in this stock.
Similar to Frontier Corp., Windstream Holdings has also seen its stock depreciate significantly since the start of 2017. Last year, Windstream shares fell 73% and the stock is further down by 44% in 2018. This communications services firm is expected to experience a revenue decline of over 4% in 2018.
Analysts also expect its earnings per share to fall from -$8.15 in 2017 to -$11.23 in 2018. In June 2018, Citigroup analyst Michael Rollins downgraded Windstream stock from “hold” to a “sell” as Windstream’s operating position is precarious and fraught with financial risks.
Windstream has a total debt of $10.74 billion and approximately $60 million in cash and analysts have now started to question the company’s long-term sustainability. Windstream has an average price target of $6.46 which is 26% higher compared to its current price of $5.14.
Shares of Dish Networks have also declined over 26% this year after falling close to 18% last year. Cord cutting has led to a decline in customers for Dish Networks, which is expected to lead to a 5% year-over-year decline in revenue during 2018 and a 4.6% decline in 2019.
Dish Networks reported Q2 results and lost 192,000 satellite customers in their latest quarter. However, the company has an online streaming service known as Sling TV and this vertical added 41,000 subscribers in Q2 2018. Analysts are optimistic about this stock and Dish Networks is currently trading at a discount of 51% to analyst price target estimates.
GoPro’s stock has declined significantly since 2014. GoPro became a publicly traded firm in June 2014 and its stock price rose from $35.76 since the IPO (initial public offer) to almost $87 in October 2014. The shares have since been in a freefall. GoPro stock fell 50% in 2016, 13% last year and has declined over 18% in 2018. GoPro has been struggling with device sales over the past few quarters. The company also had to discontinue manufacturing its drone after lackluster demand from customers.
GoPro operates in a very niche market with a high product price point. GoPro now intends to increase sales after launching devices targeting several consumer segments. GoPro is currently trading at $6.20 which is higher than the average price estimate of $6.09. Although GoPro might return to revenue growth in fiscal 2019, investors need to take a wait and watch approach with regards to this stock.
Shares of Symantec have declined close to 30% in 2018. In early August, shares fell 9% after the firm reported a weak outlook for fiscal Q2 2019. Symantec estimated revenue between $4.67 billion and $4.79 billion in Q2 2019 which was below analysts estimates of $4.84 billion.
In May 2018, the company launched an internal investigation after a former employee raised concerns over the disclosure of financial results which also dragged the share price lower. Symantec faces competition from cybersecurity leaders including Cisco, Palo Alto Networks, Fortinet, and FireEye. This will result in a revenue decline of almost 5% for Symantec in fiscal 2019. The company’s earnings per share is estimated to fall 11% year-over-year to $1.51 in fiscal 2019. Symantec is trading at a discount of 11% to analyst estimates as well.
Shares of Fitbit have declined marginally by 0.2% this year after falling 22% in 2017. Similar to GoPro, Fitbit is also impacted by declining device sales coupled with competition from niche and established players including Apple, Xiaomi, Garmin, and Fossil. Fitbit shares have declined significantly from $47.17 in July 2015 to its current price of $5.70.
Fitbit has managed to lose market share over the last few quarters and the company’s device sales have fallen despite robust growth in the global wearable market. Though Fitbit’s Versa which is its latest product has already sold over a million units, analysts and investors might not be too confident about entering the stock at current levels.
CHART: How Blockchain Powers Bitcoin
Blockchain, Bitcoin. Bitcoin, blockchain.
The two terms go hand in hand—and have become almost ubiquitous with this year’s insane rise (and fall) of Bitcoin.
But what does it all really mean? How does it come together? In this week’s chart, our friends at CB Insights break down exactly how blockchain powers Bitcoin.
This Mogul Became America’s 1st Black Billion-Dollar Businesswoman
Where to start?
She’s the first black billion-dollar businesswoman. Before Oprah Winfrey.
She started as a TV executive, founding Black Entertainment Television (BET), the first TV network targeting African Americans. She then became a real estate mogul.
Oh, she also owns a stake in three major sports franchises, the NBA Wizards, NHL Capitals and the WNBA Mystics, the African American, period, to boast that claim.
In honor of Black History Month, let’s dive into her remarkable career.
- Born Sheila Crump in McKeesport, Pennsylvania, Johnson co-founded BET in 1979 with then-husband Robert Johnson. The couple sold it to Viacom in 2000 for $2.9B
- Sheila Crump Johnson became the first African American woman on the Forbes’ Billionaire list in 2000—beating Oprah Winfrey to the distinction.
- Per Forbes, Johnson has an $820M net worth as of 2019
Foray into real estate…
After closing the sale to Viacom, Robert and Sheila pocketed around $1.5B each. Johnson used that windfall as seed money to build a hospitality real estate empire in 2005.
“There’s a disparity in paychecks between whites and blacks,” she told the Wall Street Journal. “I will never forget that.”
As CEO of Salamander Hotels and Resorts, Sheila controls a spectacular portfolio of six luxury hotels in Florida, Virginia and South Carolina. And she’s built it from the ground up—literally—in her own spirit.
“I’ve been to many hotels, not only in the US, but all over the world,” she told Forbes last year. “And I wanted to find something that was going to really make Salamander stand out beyond all of these hotels.”
So what does that mean?
“You have to understand, there are a lot of people, investment companies, with very deep pockets,” she says. “They can do it, but they don’t have the experiences that we’re able to bring. I am constantly trying to find a way to help Salamander Resort & Spa stand out head over heels above any other hotel — not only in the area, but in the nation.
“I want them to leave that resort wanting to come back and not just say, ‘I’ll be back in six months.’ I want them to come back all the time.”
And so far it’s worked. In fact, on Forbes Travel Guide’s 61st list of Star-Rated hotels, Johnson’s Salamander Resort & Spa outside of Washington, DC earned a Five-Star distinction.
Forbes: “Everything [she] touches turns to gold.”
That’s a real quote. From Forbes. Last year. It’s also true.
BET? Billion-dollar exit. Washington Capitals? Stanley Cup.
And Roma. Won 10 Oscars. Who showed it before a single soul started caring? Johnson’s Middleburg Film Festival. (Which, by the way, has 32 films and counting in Academy Award contention.)
Remember her golf resort at Innisbrook? Oh, yeah. Hosts the Valspar Championship, one of the PGA calendar’s most-anticipated tournaments.
Becoming a billionaire comes with a new level of clout as well. “When you don’t have money, you’re not invited to special events; you really don’t matter,” she told WSJ. “It’s a society thing.”
So instead, she’s turned to giving back. Her Sheila Johnson Fellowship’s paid for more then 40 scholarships at Harvard University for students who otherwise wouldn’t afford to attend.
Breaking glass ceilings.
There’s an alarming statistic in business and diversity—especially as it pertains to women. According to research by investor Richard Kerby, 18% of all VCs are women—and only 3% are black. In addition, less than 50 black women ever have raised $1M in funding.
“When I got started,” Johnson says, “I couldn’t get a loan. I had to use my own money to get Salamander Resort and Spa.”
She explained to WSJ last year that men can go to any bank with a bank proposal. And no matter how “wacky” the idea is, she said, “they’re going to get the financing. Women do not have that ability.”
Johnson’s taken it upon herself to do something about that, becoming one of the founding partners of WE Capital, an investment firm that invests in female entrepreneurs.
“I started out in a very unique position where I had my own capital to be able to get started,” she says. “But there have got to be banks and investors that believe in helping women who want to be entrepreneurs in the hospitality business.
“And it’s just really, really important that they really take a look at this.”
VIDEO: How Far Does $150K A Year Get You In New York City?
No matter what metric or list you look at, it goes without saying: New York City is one of the most expensive places in the world to live in.
In this video, CNBC spoke to a Millennial who runs her own brand consulting agency and wants to #WealthHACK her way to retirement by 40.
She makes $150K a year. But how far does that actually get her? Check it out.