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The monetary forces that have helped feed the bull market are so strong that scores of stocks have risen significantly over the past year even as the companies themselves have been losing money.
A list of some of the best performers among the money losers is below.
In a Wall Street Journal article, James Mackintosh called Tesla TSLA, +7.95% and General Electric GE, +3.26% “the two most valuable loss-making companies,” after Tesla’s shares had doubled in three months and GE’s stock had risen 44%.
“The proportion of U.S.-listed companies losing money for three years reached its highest last year in data stretching back to the late 1990s,” Mackintosh wrote, citing data compiled by Andrew Lapthorne, global head of quantitative research at Société Générale.
With negative interest rates in Europe and Japan, and increasing stimulus by the U.S. Federal Reserve, maybe investors shouldn’t be surprised that the S&P 500 Index SPX, +0.48% has returned 26% over the past year. Investors see the U.S. stock market as a haven.
Tesla and GE provide contrasts when looking at money-losing companies whose stocks have soared. Tesla’s shares have risen after the electric-car maker reported a third-quarter profit, opened a China factory in the fourth quarter and enjoyed a spike in demand.
GE represents a cleanup project. Even after recent gains, the stock is down 59% over the past three years.
Another example of a recovery play, listed below, is Caesars Entertainment CZR, +0.59%, which is up 55% over the past year, as the casino company has continued its multiyear investments in property upgrades.
A look at the broad U.S. market, as represented by the Russell 3000 RUA, +0.51%, shows 808 companies that have negative earnings per share for the past four reported quarters combined. Of this group, 149 of the stocks have returned 50% or more over the past 12 months through Jan. 12, with dividends reinvested.
That is such a large list that we turned to the S&P Composite 1500 Index, which is made up of the large-cap S&P 500, the S&P 400 Mid-Cap Index MID, +0.62% and the S&P Small-Cap 600 SML, +0.74%. S&P Dow Jones Indices has various criteria for a company’s initial inclusion in an index. One of these is that it most show four quarters of profitability. So all these companies have been consistently profitable at some point, even if they have been going through a difficult period recently.
Among the S&P 1500, there are 211 companies that have lost at least a penny a share for the most recently reported four quarters combined through Jan. 12. The S&P 1500 Composite Index has returned 28% over the past year, and 45 companies have performed at least as well as the index, with four returning more than 100%.
Here’s the entire list, sorted by 12-month total returns:
| Company | Ticker | Total return – 12 months through Jan. 12 | EPS – past four reported quarters | Sales growth – past 12 months from previous 12-month period | Gross margin – most recent quarter | Gross margin – year-earlier quarter |
| Diebold Nixdorf Inc. | DBD, -0.58% | 201% | -$4.48 | 0% | 25.35% | 21.20% |
| Cutera Inc. | CUTR, -1.12% | 158% | -$2.62 | 6% | 56.88% | 52.75% |
| Ultra Clean Holdings Inc. | UCTT, +2.26% | 133% | -$0.01 | -5% | 18.68% | 14.06% |
| LivePerson Inc. | LPSN, +0.45% | 102% | -$1.21 | 15% | 70.05% | 72.38% |
| Invacare Corp. | IVC, -1.42% | 82% | -$1.07 | -4% | 28.29% | 26.57% |
| PDF Solutions Inc. | PDFS, +2.43% | 82% | -$0.22 | -11% | 59.44% | 46.61% |
| Agilysys Inc. | AGYS, +0.79% | 81% | -$0.52 | 15% | 46.40% | 47.95% |
| Cardiovascular Systems Inc. | CSII, +0.58% | 80% | -$0.09 | 15% | 79.99% | 81.21% |
| Western Digital Corp. | WDC, +1.55% | 76% | -$5.27 | -24% | 20.45% | 33.09% |
| Veeco Instruments Inc. | VECO, +1.10% | 76% | -$4.08 | -30% | 34.80% | 33.29% |
| Lumentum Holdings Inc. | LITE, +0.49% | 75% | -$0.62 | 22% | 35.87% | 35.58% |
| Momenta Pharmaceuticals Inc. | MNTA, +6.38% | 74% | -$2.16 | -40% | N/A | N/A |
| Triumph Group Inc. | TGI, -0.72% | 73% | -$3.43 | -4% | 15.50% | 9.03% |
| Universal Electronics Inc. | UEIC, -2.81% | 71% | -$1.05 | 8% | 23.98% | 21.53% |
| Synaptics Inc. | SYNA, +2.44% | 70% | -$0.67 | -14% | 36.28% | 33.02% |
| Rambus Inc. | RMBS, +3.04% | 70% | -$0.75 | -12% | 66.80% | 79.03% |
| Colfax Corp. | CFX, +1.90% | 68% | -$3.38 | 32% | 43.49% | 32.68% |
| Tenet Healthcare Corp. | THC, +0.25% | 67% | -$2.31 | -2% | 8.47% | 7.77% |
| Harmonic Inc. | HLIT, +2.32% | 64% | -$0.10 | 1% | 64.88% | 49.02% |
| Cytokinetics Inc. | CYTK, +7.48% | 61% | -$2.08 | 40% | N/A | N/A |
| Circor International Inc. | CIR, +3.68% | 59% | -$7.86 | 5% | 30.95% | 32.39% |
| Aecom | ACM, +1.64% | 58% | -$1.67 | 0% | 4.66% | 3.54% |
| Stericycle Inc. | SRCL, +0.81% | 56% | -$4.91 | -5% | 31.62% | 36.44% |
| Caesars Entertainment Corp. | CZR, +0.59% | 55% | -$1.06 | 6% | 39.53% | 36.93% |
| Papa John’s International Inc. | PZZA, -0.52% | 55% | -$0.50 | -9% | 14.05% | 10.78% |
| Equifax Inc. | EFX, +1.27% | 54% | -$3.18 | 1% | 47.63% | 45.74% |
| Coty Inc. Class A | COTY, -0.85% | 53% | -$4.95 | -7% | 57.64% | 55.87% |
| Boise Cascade Co. | BCC, -0.40% | 53% | -$0.16 | -8% | 13.36% | 11.33% |
| Jacobs Engineering Group Inc. | J, +0.43% | 51% | -$0.69 | 21% | 18.72% | 18.88% |
| P.H. Glatfelter Co. | GLT, +1.29% | 48% | -$1.30 | 9% | 15.60% | 14.88% |
| Zimmer Biomet Holdings Inc. | ZBH, -0.55% | 45% | -$0.49 | 0% | 63.35% | 63.43% |
| Hain Celestial Group Inc. | HAIN, +0.83% | 41% | -$2.26 | -7% | 19.64% | 16.50% |
| Legg Mason Inc. | LM, +1.48% | 41% | -$0.74 | -8% | 83.91% | 82.31% |
| Crocs Inc. | CROX, -1.94% | 39% | -$0.34 | 10% | 52.38% | 53.27% |
| Hess Corp. | HES, +1.34% | 36% | -$0.68 | -3% | 12.42% | 20.89% |
| National Storage Affiliates Trust | NSA, +1.85% | 35% | -$0.47 | 13% | 38.46% | 37.87% |
| Cohu Inc. | COHU, +3.12% | 35% | -$2.67 | 68% | 34.12% | 39.90% |
| Live Nation Entertainment Inc. | LYV, +1.52% | 33% | -$0.01 | 7% | 22.44% | 21.15% |
| CyrusOne Inc. | CONE, -5.67% | 32% | -$0.15 | 22% | 16.94% | 21.73% |
| Coca-Cola Consolidated Inc. | COKE, +1.75% | 32% | -$0.60 | 4% | 33.88% | 34.21% |
| Edison International | EIX, -0.16% | 32% | -$0.99 | -4% | 19.59% | 19.28% |
| Allergan plc | AGN, -0.46% | 31% | -$27.85 | -1% | 46.32% | 44.59% |
| Kite Realty Group Trust | KRG, +0.16% | 29% | -$0.56 | -8% | 29.66% | 29.89% |
| Weyerhaeuser Co. | WY, +1.64% | 29% | -$0.20 | -13% | 16.28% | 23.98% |
| Washington Real Estate Investment Trust | WRE, +1.05% | 28% | -$0.05 | 1% | 15.23% | 24.03% |
| Source: FactSet | ||||||
You can click on the tickers for more about each company, including profiles, news, price ratios, analysts ratings and financials.
To be sure, many of these stocks recovered from previous declines as investors became enthusiastic about management teams’ turnaround efforts. But some additional data may also point to reasons for investors’ confidence.
The table includes sales-growth numbers as well as gross margins for the most recently reported quarter and the year-earlier quarter. These might provide some insight into why these stocks have performed so well over the past year.
A company’s gross margin is its sales, less the cost of goods sold, divided by sales. It is a measure of pricing power. A narrowing margin might result from discounting or other efforts to increase or defend market share. A continually narrow margin might be a bad sign. An expending margin, especially when sales are growing, is a positive sign that a company is remaining competitive.
Gross margin isn’t used in the banking, insurance and real estate investing industries. It is most useful to gauge a single company’s pricing power over time. It doesn’t make for useful comparisons across industries.
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