Should You Buy the Dow Jones' 4 Worst-Performing 2022 Stocks?

Any investor can tell you that 2022 has been a rough year for the stock market. As of Aug. 31, the Dow Jones Industrial Average is down by 13% for the year, and we still have four months to go.

While this is certainly poor performance, there are some Dow components in far worse shape. Here’s a look at the four worst-performing stocks in the widely followed index, why each one is down, and whether they could be buying opportunities for patient long-term investors now.

The 4 worst-performing Dow Jones stocks in 2022

The Dow Jones Industrial Average is down significantly through the first eight months of 2022, but some of the 30 component stocks have fared much worse. Here are the four worst performers on the index through Aug. 31.

Company (Symbol)

Industry

YTD Performance Through 8/31/2022

Walgreens Boots Alliance (WBA 0.03%)

Retail

(30.1%)

Nike (NKE -0.42%)

Consumer Goods

(35.7%)

Intel (INTC -1.70%)

Computer Hardware

(36.4%)

Salesforce (CRM 0.10%)

Software

(38.4%)

Data source: YCharts. Returns through 8/31/2022 midday and are total returns (dividends included). Parentheses indicate negative numbers.

Why have these stocks performed so poorly?

It’s not hard to see why each of these stocks has earned a spot on the worst-performing list. Here’s the short version of what’s going on with them:

  • Walgreens’ sales and net income both declined year over year, including a nearly 10% drop in pharmacy sales in the last quarter. And due to higher expenses, Walgreens’ bottom-line profit declined by 80% from a year ago.
  • Nike investors are worried that consumer spending could continue to slow, and its recent results haven’t exactly been encouraging. In the latest quarter, Nike’s inventory increased significantly as sales declined slightly year over year. Plus, the company warned that it would need to pivot to a more promotional sales approach to control inventory, which could be a sign that profitability could come under pressure.
  • In its second-quarter earnings report, Intel reported a massive disappointment on both the top and bottom lines, and lowered its guidance for the second half. And as any experienced investor can tell you, there are few more sure ways to guarantee poor stock performance than lowering your future expectations.
  • Salesforce is part of one of the worst-performing industries in the stock market — software — and also reduced its guidance for the rest of the year. The company is expecting its customers to be a little more cautious when it comes to spending for the foreseeable future, which isn’t exactly a positive catalyst.

So all four stocks are down for a reason. The question investors need to ask themselves is whether they are temporary reasons or not.

Is now the time to buy?

All four of these companies are time-tested businesses that have a lot to like. For example, Walgreens’ core business is incredibly solid and profitable, and the company has tons of potential on the fast-growing healthcare side of the business. Salesforce provides products that businesses need to interact with customers, and Intel is the leader in its industry. And there’s simply no sports apparel brand as recognizable as Nike — this hasn’t changed for decades.

It’s never a great idea to buy a stock just because its price went down, and all four of these stocks are experiencing significant headwinds right now. But if you’re a patient long-term investor, it could be a smart time to take a closer look at these beaten-down blue-chip stocks.

Matthew Frankel, CFP® has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intel, Nike, and Salesforce, Inc. 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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