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60 Worst Performing S&P 600 Small Cap Stocks

The after-Christmas period is at times where some of the best bargains can be found in retail. A glut of inventory can lead post-holiday prices to be slashed. In small-cap space, we have already seen that level of discounting. Since the S&P 600 Small Cap Index (IJR) made its high on August 31st, the gauge is down 27%. For the worst performing decile of that small-cap index, performance has been much worse as tabled below.

While just four S&P 500 constituents that have produced -50% or worse returns since the large cap index peaked on September 20th, a full 55 companies (9% of the index) have lost half their value since the recent peak in small-cap space.

Returns have been especially weak in the commodity-sensitive sectors with small-cap energy and small-cap materials off 47% and 27% respectively year-to-date. These are companies that managed to survive through the commodity bust from late 2014 to early 2016, but the market is again challenging whether they will survive the recent commodity sell-off. Health care, utilities, and consumer staples have been relative outperformers and are less represented on this list of laggards.

In an accompanying article out today, I have published data showing that drawdowns this rapid and this severe for small-caps have typically been followed by strong gains over the next one year. For bargain-hunting small-cap shoppers, I hope this provides a good screen for potential opportunities.