Best & Worst Trades of 2012
The stock market's biggest winners and losers of the year include companies from a wide swath of sectors, from traditional retailers to technology, from financial services to durable goods. Following are 10 of the best and worst trades of 2012, ranked by percentage changes from the start of the year.
Click to see the Top 10 best and worst trades of 2012.
Reported by Scott Wapner, CNBC
Posted 21 December 2012
Facebook (FB)
Year-to-Date: Down 27 Percent
A trading glitch at Nasdaq on the day of Facebook's initial public offering provided an inauspicious start to one of the most-anticipated IPOs in recent years. Shares opened at $38, briefly spiked higher before trading down as low as $17 in the following months as questions about how the social media giant would generate revenues. Improved performance in the following months, a mobile advertising strategy and plans to monetize its Instagram acquisition lifted Facebook's stock price toward the end of the year.
(Watch: Time to 'Like' Facebook Again?)
J.C. Penney (JCP)
Year-to-Date: Down 43 Percent
Despite the best efforts of Apple's former marketing whiz, Ron Johnson, who now heads J.C. Penney as its CEO, this retailer's stock fell from its high of $43 in February to the $20 level in mid-December. High hopes for a turnaround in the heavily competitive retail sector never materialized, and the stock has yet to regain its footing. Competitors such as Macy's, Nordstrom, and Saks, meanwhile, saw their shares post year-to-date gains.
(Read More: J.C. Penney Stock 'A Disaster': Kernkraut)
Hewlett-Packard (HPQ)
Year-to-Date: Down 44 Percent
From a February high near $30 per share, Hewlett-Packard shares have been battered by a bleak PC market and, last month, an announcement that the company would take an related to its acquisition of Autonomy. Hewlett-Packard also alleged that it was misled in the $11 billion purchase. While some investors view the company as being more valuable as two separate entities, few expect CEO Meg Whitman to take HP in that direction.
(Watch: Buy Hewlett-Packard on Icahn Rumor?)
Best Buy (BBY)
Year-to-Date: Down 48 Percent
Looking at Best Buy's stock price in December, it's tough to believe that shares appeared poised to hit $30 in March. A few reasons have contributed to the decline, from a third-quarter loss and worsening cash flow, not to mention increased competition from Amazon.com. Best Buy's founder and its largest shareholder, Richard Schultze, reportedly sought to take the company public, but faces a financing hurdle, adding more uncertainty to the company's shares.
(Watch: Worst Trades of 2012: Best Buy)
Knight Capital Group (KCG)
Year-to-Date: Down 70 Percent
Until the morning of Aug. 1, Knight Capital Group performed well as one of Wall Street's biggest market makers — a middleman of sorts that executed trades on behalf of its broker customers, similar to E*Trade Financial. But a trading glitch nearly put the company out of business and sent its stock plunging 65 percent. Knight Capital would lose more than $440 million that day, an amount greater than the company's second-quarter revenue. In mid-December, the company agreed to a buyout from Getco at a third of its value from the beginning of 2012.
(Watch: Worst Trades of 2012: Knight Capital)
Yahoo (YHOO)
Year-to-Date: 21 Percent
Now for the best trades of 2012.
With Marissa Meyer at the helm — a new CEO with a Google pedigree — Yahoo saw its stock price run up to its highest level in four years. Some have questioned whether the positive sentiment is justified, but so far Meyer has upped spending on advertising and quickly closed the , all while improving employee morale. For now, Wall Street is willing to give Meyer the benefit of the doubt.
(Watch: Web Extra: Searching for Yahoo)
Apple (AAPL)
Year-to-Date: Up 29 Percent
No stock was more talked-about in 2012 than Apple — and for good reason. Shares hit a record $705 in September as the company rolled out its new iPhone 5, iPad Mini, and sky-high expectations. While Apple's stock price recently posted big losses — briefly falling below $500 mid-December — it's still up nearly 30 percent for the year. While a range of analysts have downgraded the stock and investors are questioning it, there is also exposure to the Chinese market and a rumored Apple TV ahead.
(Read More: Gene Munster's 3 Catalysts for Apple in 2013)
Home Depot (HD)
Year-to-Date: Up 47 Percent
The largest gains in home prices since 2006 and recovery efforts following super storm Sandy boosted Home Depot's bottom line in the third quarter, beating Wall Street estimates and sending the stock 47 percent from the start of the year. The retailer also raised its full-year earnings forecast to $3.03 per share, and announced that it would repurchase an additional $700 million of outstanding shares in the fourth quarter.
(Watch: Best Trades of 2012: Home Depot)
American International Group (AIG)
Year-to-Date: Up 52 Percent
A company that nearly went out of business before a government bailout during the financial crisis provided one of the 2012 surprise turnaround stories. The U.S. Treasury Department profited from its stake in the company, and AIG itself gave up its holdings of Hong Kong-based insurer AIA as part of its sell-off of some $65 billion in assets. In the process, CEO Bob Benmosche freed up more capital, repurchased stock, presided over the company's return to profitability, and announced the possibility of a dividend in 2013.
Bank of America (BAC)
Year-to-Date: Up 105 percent
Bank of America's share price has been on a steady climb over the past 11 months, and in December it hit its highest level since the summer of 2011. The No. 2 housing lender in the U.S. certainly from an increase in mortgage applications, but CEO Brian Moynihan has also been credited for streamlining the company's core business and reducing its workforce to increase profitability. Bank of America stock also trades at a significant discount to the company's tangible book value — and less than many other financials in the S&P 500.