Is It Time to Buy the S&P 500's 5 Worst-Performing August Stocks?

The S&P 500 benchmark index had a rough month in August. Through Aug. 30, the S&P 500 had declined by 4% for the month, with the worst of it coming in the latter half of the month following a stock market rebound in July and early August.

However, some stocks got hit much harder than the overall index. Five stocks in the index actually had double-digit declines in August, with three down by more than 20% for the month. Here’s a rundown of the five worst performers in the S&P 500, the short version of why each one is down, and whether patient investors should consider buying these stocks now for the long term.

The worst-performing stocks in the S&P 500 in August

I won’t keep you in suspense. Here are the worst-performing stocks in August out of the 500 companies in the S&P 500 benchmark index.

Company (Symbol)

Industry

August Price Change

Intel (INTC -1.05%)

Semiconductors

(11%)

Mohawk Industries (MHK -0.25%)

Flooring

(14%)

Match Group (MTCH 0.09%)

Software

(23%)

Ball Corp (BALL -1.43%)

Consumer Goods

(23%)

DXC Technology (DXC 1.10%)

Information Technology

(23%)

Data source: yCharts. Performance through August 30. Parentheses indicate negative numbers. 

Why have these stocks been such underperformers?

These companies all operate in different industries, and as a result, the reasons for their declines vary. Sure, some of their declines are due to conditions that are pressuring the entire market such as recession fears and rising interest rates. But some are company-specific, with four of the five declines coming as a result of weak earnings or guidance.

Intel’s second-quarter earnings were a disappointment, and the company’s outlook is rather uncertain, plus competitors like AMD (AMD -2.38%) are gaining market share. Mohawk hasn’t had much company-specific news recently, but we’re seeing signs of a major slowdown in spending on home renovations. Match Group’s move was earnings related, as the online dating app company reported revenue that significantly missed expectations and issued revenue guidance for flat year-over-year growth in the third quarter.

Ball Corp (which makes jars and canning products) reported 20% year-over-year revenue growth, but the divesting of its Russian assets contributed to a larger-than-expected loss, and its North American beverage segment posted weak numbers. Finally, DXC Technology’s revenue came in lighter than analysts had hoped to see, and bottom-line profitability was disappointing as well, on top of disappointing guidance for the third quarter.

Should investors buy these stocks now?

All five of these are strong and established businesses, but all are going through periods of general uncertainty. The question from a long-term investor’s perspective is whether or not they’ll rebound and continue their prior growth trajectories.

To be perfectly clear, it’s not a great idea to hit the “buy” button just because a stock has declined. But if you like any of these five businesses and believe in its long-term potential, now could be an opportune time to take a closer look.

Matthew Frankel, CFP® has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, and Match Group. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel and short January 2023 $57.50 puts on Intel. The Motley Fool has a disclosure policy.

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