Here are the 40 worst performing technology sector stocks so far this year, and as you can see—it has been ugly.
And considering we have so much economic data coming out this week (GDP, fed meeting, lots of big earnings announcements) things can still get worse.
However, as you can see in the table above, a these companies continue to rapidly grow their revenues while maintaining high gross margins.
From the list, we own small positions in Shopify (SHOP) which announces earnings in two days, and Digital Turbine (APPS) which announces in about two weeks (both are held in our Disciplined Growth Portfolio). We’ve recently written them both up here and here. Both have strong gross margins, positive net margins, and have been positing strong gains over the last 10-days (see above). Importantly, both have significant secular growth opportunities and trade at lower valuation multiples than they should, in our view.
And for good measure, here are the next 40 worst performers that made the list (we own shares of The Trade Desk (TTD) and a small position in Palantir (PLTR) from this second list—both within our Disciplined Growth Portfolio).
The key takeaways here are simply that there are many powerful high-growth businesses that have sold off hard this year. And when the market does finally bottom (if it hasn’t already) it will be off to the races for top growth stocks.
Many investors simply cannot handle the high volatility we’ve experienced this year, and that’s fine (there are less volatile investments for you—such as those held in our Income Equity Portfolio). But for those who can hand the volatility—they will likely be rewarded with significantly better long-term returns.