15 of 2015’s Market Winners and Losers

By Allison Eklund

Allie Eklund
Allie Eklund

It was a stock picker’s market in 2015. That is, there was money to be made in certain areas of the economy, while in others, not so much. Here are some of this year’s biggest economic winners and losers. The information I’m providing is not a recommendation to buy or sell any security, and is intended only for educational purposes. Market data was obtained from multiple news sources on December 14th, 2015.

 

Mickey D’s: Winner, winner, Chicken McNugget dinner. McDonald’s has killed the breakfast game this year- their nationwide all day breakfast menu that launched this fall may have a lot to do with the upward direction their stock (MCD) price took in 2015. Duly noted, if business slumps, add some BAE…bacon and eggs.

Chipotle: Once considered a growth stock, Chipotle CMG quickly went into “value” territory with the notable E. coli outbreak on the West Coast, and a mysterious outbreak on the East Coast. Hungry eaters beware. Investors read on, this could spell “opportunity.”

American oil companies: OPEC (the Organization of the Petroleum Exporting Countries… think Middle East oil tycoons) decided to turn on the oil spigot, and hasn’t eased up. This has created a large supply of oil for global consumers. When supply is abundant, prices drop. Why would OPEC do this you ask? They’ve driven down the price of oil so far that it’s driving out their competition, American energy producers. Example? If it takes $50.00 per barrel to break even, you must sell your barrels for more than $50.00 to make a profit. This week, oil barrels hit record lows…. OPEC is selling oil abroad for less than what US suppliers need to cover their operating costs. US oil suppliers are losing big time. North Dakota, one a boom state, is now seeing a bust.  

Your gasoline budget: While domestic oil and energy companies took a hit over the last year and a half, your wallet fattened a tad. The upside is that driving mom’s Suburban to Disneyland actually sounds like a good idea right now. Price at the pump has dropped to nearly $2.00 a gallon in the Sacramento region. Lower gasoline prices may be hurting certain American companies, but consumers are benefitting.

Ashley Madison: Don’t worry, this cheater’s paradise is not in your company’s 401(k) plan, but it could have been! Talk about socially responsible investing, or lack thereof! Ashley Madison, a website notorious for linking up those in the adulterers community, suffered a major blow this year (no pun intended) when their database was hacked. The company, which was nearing an initial public offering, almost exposed its 31 million male accounts and 5 million female accounts… strange ratio.

Netflix: Netflix and Chill, the most popular date of 2015, may have been the reason this stock had a tremendous year. Netflix (NFLX) has continued to climb, doubling its stock price through the first week of December.

Aerojet Rocketdyne: Headquartered in Sacramento, CA, Aerojet won over a billion dollars in propulsion contracts from NASA and Boeing. Translation: a local space and defense contractor just secured major dough to create new space shuttles. Great news for our region and great news for AJRD shareholders.

Turing Pharmaceuticals: CEO Martin Shkreli decided to increase the price per pill of Daraprim, a drug Turing Pharmaceuticals, LLC manufactures that is relied on by HIV/AIDs patients. The increase went from $13.50 to $750…quick numbers, that’s a 5,000% increase, per pill. The medical community and patient advocates have decried this price hike as “unsustainable.” When Shkreli’s public image couldn’t get worse, he was arrested Thursday morning, December 17th for securities fraud.

Imprimis Pharmaceuticals: On the heels of the backlash to the 5,000% increase lead by Turing Pharmaceuticals, competitor Imprimis Pharmaceuticals will be offering an alternative pill. Yet to be approved by the FDA, Imprimis (IMMY) plans to offer the potentially life-saving pill for $1.00 each- giving these HIV/AIDs and cancer patients a much needed relief. More than this being a lesson about Karma, this is yet another great lesson about how a competitive economy works… as the free market and humanity are the real winners here.

Starbucks: It must be true, all publicity is good publicity…even if it is in regards to, gasp, solid red cups. Starbucks stock price has seen a steady trend upwards this past year. With better earnings per share and income growth, the only thing that’s been in the red this year for SBUX has been their controversial cups.

Coffee as a commodity: Coffee supply is up, and coffee-producing countries’ currencies are down, explains Bloomberg. Marvin Perez reports that “coffee has tumbled 27%, more than oil, gold, or copper.” This has brought the price of beans down, and your coffee goes buzz up.

Volkswagen: Okay, I retract my previous comments…not all publicity is good. At least not for the German automaker, VOW. Within the days of the faulty emissions scandal breaking, Volkswagen’s stock price plummeted 50% below the 2015 stock price high. A painful unraveling of the company ensued. The CEO resigned shortly after the news broke, and fingers have been pointed every which way as to why the corporations corruption.

Amazon: The online retailer is more than just that- it’s a business modeled around disruptive innovation. With all the new services Amazon offers, CEO Jeff Bezos has us all thinking “just what will they think of next?” Drone Delivery? Roger that. Bezos’s most notable new revenue generator is Amazon Web Services, which provides global remote computing services. This cloud computing arm of the company gave AMZN nearly the same level of Q3 profit in 2015 as their North America online commerce business.

Tiffany’s: Maybe our society is realizing diamonds aren’t really a girl’s best friend…or a scarce resource, either. Yet, one of the biggest reasons TIF has seen a major decline this year has to do with a strong US currency. Luxury goods have been a hot ticket item for tourists and consumers abroad. International buyers have less purchasing power this year because of the U.S. dollar strengthening. With the U.S. dollar increasing in value, and many other foreign currencies such as the Euro, Yen, and namely the Chinese Yuan drop in value, buyers abroad have backed off U.S. consumer discretionary goods.

Puerto Rican Municipal Bonds: U.S. investors have long bought municipal bonds from Puerto Rico because of their attractive triple tax-free income characteristics. “Unlike the bonds of most states and municipalities, Puerto Rico’s are exempt from local, state and federal taxes everywhere in the U.S.” explains Bloomberg. However, in June, Puerto Rico’s Governor said the country is likely not able to pay their debts back. Certain Puerto Rican agencies have already defaulted on their debt. This is a very grim situation since Puerto Rico has primarily raised money operated through municipal bond offerings.

 

 

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