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10 Companies That Tumbled in 2012

Rick Newman

It's been a surprisingly good year for stocks--surprising because it wasn't terrible.

[ENJOY: Political Cartoons on the Economy]

A lot of things nearly went wrong in 2012. The U.S. economy bumbled along, with the political showdown over the "fiscal cliff" slowing growth and even threatening a recession. Europe sank deeper into the doldrums, China slowed more than expected, and hotspots like Iran continued to darken the outlook.

Most companies managed to steer around the potholes, with the overall stock market up by about 12 percent as of early December. But at some companies, the wheels came off. To identify the biggest losers, I asked S&P Capital IQ to rank the 1,500 largest public U.S. companies according to their year-to-date stock appreciation. From the worst performers, I selected companies known to most consumers whose struggles reflect broader trends in the U.S. economy. Here are 10 companies that tumbled in 2012:

Supervalu (stock price down 67 percent). This grocery conglomerate, which includes chains such as Albertson's and Save-a-Lot, has been losing sales for three straight years as discounters like Wal-Mart and Target grab an increasing share of the food business. Private-equity firms and other investors are likely to buy parts of the company in a split-up that's been anticipated for a while.

ITT Educational Services (down 66 percent). For-profit colleges such as those operated by ITT in 39 states once seemed like a clever idea, but the industry is getting hammered as the government scrutinizes its graduation rates and business practices, and traditional schools begin to offer online programs and other options. Other education companies posting big drops in their stock price this year include Apollo Group (which operates the University of Phoenix), Career Education Corp. and Strayer.

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Diamond Foods (down 57 percent). This snack food company was growing rapidly until auditors discovered accounting irregularities that forced a restatement of earnings and led to the departure of the CEO and CFO. It's still recovering from the damage.

Alpha Natural Resources (down 56 percent). The flip side of a boom in domestic natural gas and oil production is a decline in coal production, which has crushed shares of this mining company. Alpha also faces ongoing litigation related to Massey Energy--which operated the Upper Big Branch mine in West Virginia where 29 miners died in a 2010 explosion--which Alpha acquired in 2011.

Advanced Micro Devices (down 56 percent). Heard of the iPad? The surging popularity of tablet computers and other mobile devices is zapping sales of traditional PCs, which AMD makes processors for. Some analysts worry that AMD's falling sales could even lead to a cash crunch at the company sometime in 2013.

AK Steel (down 48 percent). A global slowdown--especially in China--has pushed down both steel prices and sales. AK Steel also has major pension liabilities that tie up a lot of cash. The company could rebound, though, once the global economy picks up.

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Best Buy (down 48 percent). This electronics retailer has become a "glorified showroom for Amazon," according to Harvard Business Review, which means shoppers come to check out the merchandise, then order online when they find cheaper prices. The company is revamping its network of 1,400 stores, but may not be able to move fast enough to keep up with the migration of shoppers to other outlets.

Tempur-Pedic (down 47 percent). Mattress sales are soft, and competitors peddling new foam products have been taking market share from Tempur-Pedic's specialized--and pricy--mattresses. The company recently announced plans to acquire competitor Sealy, to boost its market power.

Hewlett-Packard (down 45 percent). This storied technology company has reinvented itself many times, but its dependence on PCs and printers now seems out-of-date as consumers shift to slimmer mobile devices and the cloud. Meanwhile, a spate of acquisitions over the last several years seem to have done little for H-P, while costing it billions.

JC Penney (down 44 percent). This century-old retailer is in the midst of an aggressive makeover led by former Apple hotshot Ron Johnson, who became CEO last year. But so far, Penney's efforts to ditch its frugal image, make its stores more hip and "retrain the customer," as Johnson says, have turned off more shoppers than they've attracted.

Rick Newman is the author of Rebounders: How Winners Pivot From Setback to Success. Follow him on Twitter: @rickjnewman.

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