By Philip van Doorn
Stocks down more than 50% from their 52-week highs include Pinduoduo, Baidu, Zoom Video Communications and Peloton
The Nasdaq-100 Index has performed very well against the broader S&P 500 index in recent years and it is down only 6% from its record intraday high set on Sept. 7. Even so, more than a quarter of stocks in the Nasdaq-100 are in bear markets -- down at least 20% from their 52-week highs.
Before looking at those stocks, let's take a quick look at the Nasdaq-100 Index . It is made up of the largest 100 non-financial stocks in the full Nasdaq Composite Index and is weighted by market capitalization. The Nasdaq-100 has greatly outperformed the S&P 500 index (which is also weighted by market cap) in recent years.
Using exchange-traded funds that track both -- the Invesco QQQ Trust (QQQ) for the Nasdaq-100 and the SPDR S&P 500 ETF Trust (SPY), here is a 10-year chart showing total returns, with dividends reinvested:
One reason for QQQ's outperformance over the past 10 years has been its heavy concentration in giant tech companies. As of the close on Sept. 27, the top five companies held by QQQ (Apple Inc. (AAPL), Microsoft Corp. (MSFT), Amazon.com Inc. (AMZN), Tesla Inc. (TSLA) and two common-share classes of Alphabet Inc. (GOOGL)(GOOGL)) made up 41.3% of the portfolio. Meanwhile the top five positions of SPY (the same, except replace Tesla with Facebook Inc. (FB)) made up 22.6% of its portfolio.
Another important difference between the indexes is the Nasdaq-100 includes American depositary receipts of some non-U.S. companies, while the S&P 500 excludes ADRs. Some of the ADRs held by QQQ are included in the list below.
Here's a comparison of average annual returns for the two ETFs over many periods:
ETF 3 Years 5 Years 10 years 15 Years 20 Years Invesco QQQ Trust QQQ 25.6% 25.8% 22.0% 16.6% 14.2% SPDR S&P 500 ETF Trust SPY 16.3% 17.0% 16.4% 10.3% 9.5% Source: FactSet
One thing to keep an eye on is the relative cost of the indexes/ETFs. QQQ looks a bit expensive relative to where it usually trades against SPY. Here's a comparison of current forward price-to-earnings ratios with averages:
ETF Forward P/E 10-year average forward P/E 15-year average forward P/E Invesco QQQ Trust QQQ 26.95 19.32 18.73 SPDR S&P 500 ETF Trust 20.82 16.37 15.26 Source: FactSet
So QQQ now trades for 129% of SPY's forward P/E valuation. It has traded for 118% of SPY's forward P/E on average over 10 years and 123% based on the 15-year averages.
The Nasdaq-100 bear list
There are actually 102 stocks in the Nasdaq-100 because Alphabet and Fox Corp. have two common-share classes apiece. Here are the 22 stocks among them that were down at least 20% from their 52-week highs as of the close on Sept. 28:
Company Decline from 52-week high 52-week high Date of 52-week high Closing Price -- Sept. 28 Pinduoduo Inc. ADR Class A PDD -58.1% $212.60 02/16/2021 $89.00 Baidu Inc. ADR Class A BIDU -56.6% $354.82 02/22/2021 $154.02 Zoom Video Communications Inc. Class A ZM -55.5% $588.84 10/19/2020 $261.89 Peloton Interactive Inc. Class A PTON -48.7% $171.09 01/14/2021 $87.80 Biogen Inc. BIIB -39.2% $468.55 06/07/2021 $284.71 Splunk Inc. SPLK -37.3% $222.19 10/21/2020 $139.42 NetEase Inc. ADR NTES -37.0% $134.33 02/11/2021 $84.69 Vertex Pharmaceuticals Inc. VRTX -35.4% $280.99 10/13/2020 $181.60 Trip.com Group Ltd. ADR TCOM -33.6% $45.19 03/17/2021 $30.01 Incyte Corp. INCY -32.3% $101.47 01/25/2021 $68.68 JD.com Inc. ADR Class A JD -30.4% $108.29 02/17/2021 $75.42 Dollar Tree Inc. DLTR -28.3% $120.37 04/06/2021 $86.28 Activision Blizzard Inc. ATVI -27.0% $104.53 02/16/2021 $76.33 Illumina Inc. ILMN -26.2% $555.77 02/12/2021 $410.20 Sirius XM Holdings Inc. SIRI -25.1% $8.14 01/27/2021 $6.10 Micron Technology Inc. MU -24.6% $96.96 04/12/2021 $73.10 Seagen Inc. SGEN -24.6% $213.94 10/13/2020 $161.40 Amgen Inc. AMGN -23.3% $276.69 01/28/2021 $212.27 Moderna Inc. MRNA -22.8% $497.49 08/10/2021 $384.21 Qualcomm Inc. QCOM -22.7% $167.94 01/20/2021 $129.90 Paccar Inc. PCAR -21.7% $103.19 01/21/2021 $80.82 Intel Corp. INTC -21.2% $68.49 04/12/2021 $54.00 Source: FactSet
You can click the tickers for more about each company. Click here for Tomi Kilgore's guide to the wealth of information available for free on the quote page.
Pinduoduo Inc. and Baidu Inc. top the list, with sharp declines from their 52-week highs.
Here's a summary of opinion for the group among analysts polled by FactSet:
Company Share "buy" ratings Share neutral ratings Share "sell" ratings Closing Price -- Sept. 28 Cons. price target Implied 12-month upside potential Pinduoduo Inc. ADR Class A PDD 79% 21% 0% $89.00 $136.54 35% Baidu Inc. ADR Class A BIDU 86% 9% 5% $154.02 $256.77 40% Zoom Video Communications Inc. Class A ZM 52% 44% 4% $261.89 $363.11 28% Peloton Interactive Inc. Class A PTON 74% 19% 7% $87.80 $129.67 32% Biogen Inc. BIIB 52% 48% 0% $284.71 $418.24 32% Splunk Inc. SPLK 62% 38% 0% $139.42 $179.90 22% NetEase Inc. ADR NTES 94% 6% 0% $84.69 $124.99 32% Vertex Pharmaceuticals Inc. VRTX 74% 19% 7% $181.60 $260.67 30% Trip.com Group Ltd. ADR TCOM 71% 29% 0% $30.01 $37.25 19% Incyte Corp. INCY 60% 40% 0% $68.68 $101.27 32% JD.com Inc. ADR Class A JD 94% 6% 0% $75.42 $93.02 19% Dollar Tree Inc. DLTR 36% 60% 4% $86.28 $105.52 18% Activision Blizzard Inc. ATVI 94% 6% 0% $76.33 $115.34 34% Illumina Inc. ILMN 15% 65% 20% $410.20 $455.19 10% Sirius XM Holdings Inc. SIRI 65% 29% 6% $6.10 $7.60 20% Micron Technology Inc. MU 87% 13% 0% $73.10 $104.60 30% Seagen Inc. SGEN 57% 38% 5% $161.40 $187.35 14% Amgen Inc. AMGN 31% 61% 8% $212.27 $246.10 14% Moderna Inc. MRNA 31% 44% 25% $384.21 $351.40 -9% Qualcomm Inc. QCOM 64% 36% 0% $129.90 $184.15 29% Paccar Inc. PCAR 53% 42% 5% $80.82 $99.56 19% Intel Corp. INTC 37% 39% 24% $54.00 $61.98 13% Source: FactSet
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-Philip van Doorn