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The S&P 500 Index ended the year 2022 with a decline of 19.4%, but rebounded with a 6.18% rally in January 2023 [1,2]. While this surge can be seen as a positive indicator for traders and investors who are observing the markets, market optimism in January is common and even termed as the January Effect [3].
However, not all stocks in the S&P 500 are experiencing the same growth. Here are the 5 stocks in the S&P 500 Index that have fallen the most in January 2023.
NextEra Energy (NYSE:NEE)
NextEra Energy is a leading company in the clean energy sector based in Florida which primarily produces electricity through renewable sources such as wind and solar power. They have a large renewable energy portfolio and offer energy-related products and services through their subsidiaries, including Florida Power & Light Company and NextEra Energy Resources. Florida Power & Light Company is one of the largest electric utility providers in the US, serving over 5.7 million customers in Florida, while NextEra Energy Resources focuses on wind and solar power generation and is among the largest wind energy producers globally [4].
In 2022, NextEra Energy made substantial investments in renewable energy projects and acquired several new wind and solar farms for $805 million to expand its clean energy portfolio [5]. Additionally, the company also declared its intention to construct the FPL Manatee Energy Storage Center, which will be the world’s biggest integrated battery system powered by solar energy with aim to facilitate the integration of renewable energy into the grid [6].
For the full year of 2022, NextEra Energy reported a positive financial performance with a net income of $4.147 billion, an increase of 16.06% compared to the previous year [7]. Although the company enjoyed a strong financial performance in 2022, its stock price fell 12.96% in the month of January 2023 and closed at $74.63 on 31 January 2023 [8].
The drop in stock price could be due to a series of leadership changes that includes the appointment of a new CFO and CEO of NextEra Energy Resources, and CEO of FPL, all of whom were promoted internally. Additionally, NextEra Energy reported $6.16 billion in revenue in the fourth quarter, which was lower than the analysts’ consensus estimates of $6.3 billion [9]. The stock chart for NextEra Energy in January 2023 shows a sharp decline when the earnings report was released.
Figure 1: NextEra Energy price chart over the month of January 2023. Image obtained from Trading View.
Archer Daniels Midland (NYSE:ADM)
Archer Daniels Midland (ADM) is a global food processing and commodities trading company based in Chicago, Illinois. The company processes a range of agricultural products, including oilseeds, corn, wheat, and cocoa, and provides food ingredients and feed products to customers worldwide. ADM is also a major player in the global commodities market, trading in a range of agricultural, energy, and industrial products.
In 2022, ADM formed a strategic partnership with Benson Hill to further expand its presence in the plant-based protein market [10]. To enhance its alternative protein offerings and boost processing efficiency, the company intends to establish a new Protein Innovation Center in Decatur and invest in cutting-edge technologies [11].
ADM’s 2022 earnings showed robust financial performance, with a 41.2% and 60.2% increase in revenue ($6.6 billion) and net income ($4.34 billion) respectively, compared to 2021 [12]. The company’s earnings per share rose 8.5% YoY, and ADM increased its dividend payments to shareholders by 12.5% from $0.40 to $0.45 per share [13]. The strong financial performance was attributed to higher commodity prices and growing demand for sustainable food and feed ingredients and plant-based proteins.
Despite the positive earnings report in 2022, ADM’s stock price fell 10.8% and closed at $82.85 on 31 January 2023 [14]. Here is the chart of ADM’s market performance over the past month, which has been trending downwards.
Figure 2: Archer Daniels Midland price chart over the month of January 2023. Image obtained from Trading View.
Pfizer (NYSE:PFE)
Pfizer is no stranger to the general population, during the COVID-19 pandemic. By partnering with BioNTech, they developed and distributed a vaccine that has played a crucial role in the global effort to combat the virus. Millions of people around the world have now received the Pfizer-BioNTech vaccine, making the company a familiar name to the general public.
Pfizer’s COVID-19 vaccine was one of the earliest vaccines to receive emergency use authorisation from international regulatory agencies, including the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA) [15]. The development and release of Pfizer’s COVID-19 vaccine was a major achievement in the global fight against the pandemic and helped to bring relief to people around the world.
Despite Pfizer reporting strong financial results in 2022 with its full year revenue of $100.3 billion (an increase of 23.43% from 2021), a net income of $31.3 billion (a 42.74% increase from 2021), Pfizer’s stock price still saw a drop of 14% in January 2023 [16]. This makes it the third-worst performer in the S&P 500 for the month, with its price falling to $44.16 on the last trading day of January.
Here’s a look at the Pfizer chart.
Figure 3: Pfizer price chart over the month of January 2023. Image obtained from Trading View.
Enphase Energy (NASDAQ:ENPH)
Enphase Energy is a leading provider of solar energy technology based in Fremont, California. The company designs, develops, and manufactures microinverter systems, which are an integral part of residential and commercial solar power systems.
In 2022, Enphase continued to expand its presence in the solar energy market, launching several new products and forming partnership with Infinity Energy, a leading California-based solar and battery installer [17]. The company also made significant investments in research and development to continue to drive innovation in the solar energy industry.
Enphase’s Q4 2022 earnings report showed strong financial performance, with reported quarterly revenue of $724.7 million in Q4 of 2022 [18]. The strong financial performance was attributed to higher sales of its microinverter systems and an increased demand for solar energy worldwide. Despite strong financial results in Q4 2022, the company’s stock price still saw a drop of 16% in January, making it the second-worst performer in the S&P 500 for the month [19].
Here’s a look at the Enphase Energy chart that shows a gradual decline to $221.38 on the last day of January.
Figure 4: Enphase Energy price chart over the month of January 2023. Image obtained from Trading View.
Northrop Grumman (NYSE:NOC)
Northrop Grumman is a leading aerospace and defence technology company based in Falls Church, Virginia. The company provides advanced technology products and services to customers in the aerospace, defence, and security industries, including the United States government. Its product line includes aircraft, spacecraft, satellites, cybersecurity solutions, and advanced defence electronics and systems.
In 2022, Northrop Grumman continued to be at the forefront of aerospace and defence innovation, launching several new products and expanding its presence in key international markets.
Northrop Grumman’s Q4 2022 earnings report showed strong financial performance, with a revenue increase of 16.1% to $10.03 billion compared to 2021 [20]. Despite the positive financial results, the company’s stock price saw a drop of 18% in January 2023, marking it stock’s worst month since early 2009. This decline could have been caused by concerns over the US reaching its debt ceiling and potential cuts to defence spending to relieve the debt issue [21].
The Northrop Grumman chart shows a gradual decrease to $448.04 by the end of the month.
Figure 5: Northrop Grumman price chart over the month of January 2023. Image obtained from Trading View.
Conclusion
Despite a rough start in January 2023 for these five stocks, the S&P500 had its best January rally since 2019 as investors looked past federal reserve’s latest rate hike. Would the markets go on to show much love on the upcoming Valentine’s Day? No one knows, but like in a relationship, the stock market is full of surprises and can present opportunities for those who are committed and ready.
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References
- “U.S. Equities Market Attributes January 2023 – S&P Dow Jones Indices”. https://www.spglobal.com/spdji/en/commentary/article/us-equities-market-attributes. Accessed 3 Feb 2023.
- “Stocks fall to end Wall Street’s worst year since 2008, S&P 500 finishes 2022 down nearly 20% – CNBC”. https://www.cnbc.com/2022/12/29/stock-market-futures-open-to-close-news.html. Accessed 3 Feb 2023.
- “January Effect: What It Is in the Stock Market, Possible Causes – Investopedia”. https://www.investopedia.com/terms/j/januaryeffect.asp. Accessed 3 Feb 2023.
- “Company Profile – FPL”. https://www.fpl.com/about/company-profile.html. Accessed 3 Feb 2023.
