Investing

Flop City: 7 Big Stocks Completely Overlooked by the 10-Year Bull Market

Jon C. Ogg

Published: March 11, 2019 11:50 am

Last Updated: January 30, 2020 11:40 pm

The current bull market is now officially 10 years old. That anniversary took place on Saturday, March 9. The Great Recession was the worst modern-era recession, and it was followed by the greatest bull market of our generation as well. All the major equity indexes have risen exponentially (around 300% or more) since the V-bottom in March of 2009, but this bull market is a game of the “haves versus the have-nots.”

Long-term shareholders of quite a few large companies may never even realized it was a raging bull market because these stocks have performed so poorly in the past decade.

Look at the index gains first. March 9, 2009, was the lowest close for the S&P 500 of 676.53, but the big V-bottom intraday low was on Friday, March 6, at 666.79. The Dow Jones industrials had a low close of 6,547.05 on March 9, but the intraday low of 6,469.95 was seen on March 6 with a close of 6,626.94. The most recent index levels were 25,450 for the Dow and 2,743 for the S&P 500. That was up about 290% for the former and 310% for the latter.

The tech-heavy Nasdaq had a March 9, 2009, close of 1,268.64, which was just under the November 21, 2008, intraday low of 1,295.48 and the November 20, 2008, low close of 1,316.12. If you round the numbers to 1,300 for simplification, the Nasdaq was recently seen above 7,400 for a gain of about 470% from that V-bottom in 2009.

Seeing index gains of 300% in a decade, or even two decades, is not exactly routine. Many investors would be happy for gains of that size to come in a lifetime. But it is still important to keep in mind that the S&P 500 pre-recession peak of just over 1,550 in 2007 was not recaptured until early 2013.

24/7 Wall St. has reviewed seven large and well-known companies to show just how poorly some of these stocks performed, along with their businesses. Even if a lot of this 10-year bull market was simply playing catch-up, it still seems pretty pathetic that some corporate giants would have hardly noticed at all that they were in the midst of the greatest bull market of a lifetime.

Some of these companies might want to make references about certain numbers that have been generalized here. That’s fair enough, and some improvements might have been made in operations along the way over the past decade. That said, these large companies have all effectively ignored that it was a raging bull market when you look at the outperformance of our list of market favorites.

BlackBerry Ltd. (NYSE: BB) was the king of smartphones a decade ago, but the iPhone and the rise of Android took over the market despite BlackBerry’s higher security platforms for businesses. This was a $140 stock in 2008, and its shares went closer to $40 in early 2009, before a brief recovery back to $75 by June of 2009. After a period of ups and downs, and then just a period of downs, BlackBerry shares slid from about $70 in 2011, and by mid-2012 it was under $10. There it has remained for most of the time since. BlackBerry now has just a $5 billion market cap.

CenturyLink Inc. (NYSE: CTL) shares recently traded at around $12. With shares having seen lows of about $22 in late 2008, it briefly went up to $45 in late 2010. Since that time it has seen a period of endless negatives, with lower highs and lower lows. At least its new chief executive and financial officers have purchased shares at recent 20-plus-year lows. CenturyLink is still a $13 billion company. Being a communications leader isn’t always so great, and the $30-ish billion acquisition of Level 3 in 2017 has somehow not helped matters for shareholders.

Exxon Mobil Corp. (NYSE: XOM) may have fared better than some rival companies in oil and gas, but this is the largest public U.S. oil and gas stock, with a current market cap of $340 billion. Its stock bottomed out around $67 in March of 2009 and went on to break under $60 by mid-2010. After briefly hitting $100 in 2013, Exxon is now at about $80. It even used $31 billion or so in stock to acquire XTO Energy in 2010 to lock up its huge position for when natural gas would be a leader again.

General Electric Co. (NYSE: GE) has been the poster child of disappointment heading into and after the Great Recession. Because it was so deeply tied into corporate and consumer finance, it was always treated like a bank running an industrial company. And the mix of the businesses changed handily under Jeff Immelt and has continued to change under two other CEOs. GE stock went under $7 in March 2009, after peaking at $40 in 2007. It was back to challenging $30 by 2015, but after a year or so the problems became much more public and much more apparent. GE shares bottomed out again around $7 in December of 2018, and they were at $9.75 on last look. GE has worth $85 billion in market value, but it was booted out of the Dow Jones industrial average and is a shell of its former self.

General Motors Co. (NYSE: GM) is not quite the same GM as it was before the Great Recession. It had to go through a government bailout in bankruptcy. After closing down lines and right-sizing its operation, GM came public again in a late 2010 initial public officer at $33 per share. Its stock initially tried to go up to $40, but it sank to $20 in 2011 and 2012 before recovering. GM has been range-bound between $30 and $40 since 2013, and it was last seen at $38.50 a share with a $54 billion market cap.

International Business Machines Corp. (NYSE: IBM) was a $130 stock in mid-2008, and the stock bottomed out at $75 in November of 2008 and was closer to $90 in March of 2009 during the V-bottom for the rest of the market. After reaching $200 in 2012 and 2013, nothing has worked. Not even getting Warren Buffett as a large holder, and not the endlessly buying back stock before abandoning that $20 in earnings per share goal. Now shares are near $137, with a $122 billion market cap. CEO Rometty has run IBM since 2012, and more than a few shareholders have to be wondering why none of the new initiatives (including a large Red Hat acquisition announcement) have managed to offset the bleed of its core IT-services operations. IBM won’t even bother to report its backlog with earnings any longer.

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) has been a global leader in generic drugs for years, but it has had some missteps that have hurt long-term shareholders. Teva was close to a $45 stock around the V-bottom, and its shares did manage to rise to $70 by mid-2015. The stock was under $30 by May of 2017, and then they slid further to almost $10 before recovering. With shares at $15.75 on last look, investors who went big into Teva may have never known it was a bull market at all. Teva’s market cap is $17 billion.