We recently published a list of the 10 Worst Performing Stocks in S&P 500 in 2024. In this article, we are going to take a look at where Moderna, Inc. (NASDAQ:MRNA) stands against other worst performing S&P 500 stocks in 2024.
Since 2023, the market has experienced extended winning streaks, reflecting the economy’s resilience. The most recent rally stretched six consecutive weeks but finally came to an end between October 21 and 25, marking the first week in six to close with a loss.
Nevertheless, the tech sector still closed with small gains as it was led by Tesla after its strong earnings. Despite that, now some experts in the market are trying to broaden their investments as they see uncertainty in the coming months, mainly due to the election and geopolitical reasons.
READ ALSO: 10 Best-Performing S&P 500 Stocks in the Last 3 Years and 10 Worst Performing Dow Stocks Year-to-Date.
A New Investment Approach Favoring Value Over Tech in Uncertain Times
James Cakmak, Chief Investment Officer at Clockwise Capital, detailed his recent shift from the tech-heavy Mag7 stocks into more diverse, value-focused sectors. Initially long on tech, Cakmak’s strategy changed due to heightened risks related to the election, geopolitical tensions, and economic cycles. While tech had seen significant growth, he felt it was essential to seek other opportunities for “alpha” as the market evolved.
Cakmak explained that Clockwise Capital has moved funds into undervalued sectors, such as automotive and metals, as well as smaller, less mainstream software companies.
Addressing inflation, Cakmak stressed the importance of keeping metals as a hedge. With inflation still showing signs of persistence and the Fed adjusting its rate cut expectations, he sees value in maintaining assets that traditionally perform well during inflationary periods, including gold.
Finally, he highlighted his commitment to semiconductors as a long-term investment theme, acknowledging their volatility but affirming their relevance in driving automation and productivity.
If we talk about other opportunities in the market, Goldman Sachs is bullish on undervalued quality growth stocks and cyclical value stocks as discussed by Christian Mueller-Glissmann from Goldman in a CNBC interview. We talked about it in our article: 12 Most Profitable Growth Stocks To Invest In. Here is an excerpt from it:
“Mueller-Glissmann highlighted two key reasons for not expecting a major market decline: inflation has significantly dropped, giving central banks more flexibility, and price momentum over the past 6-12 months suggests a strong macroeconomic backdrop. With the labor market improving, he sees no signs of an economic downturn.
His strategy focuses on quality growth stocks that are temporarily undervalued and cyclical value stocks that could recover as the market stabilizes.”
Our Methodology
For this article, we checked the performance of the S&P 500 stocks and picked out the 10 stocks with the highest share price decline, as of October 24. The stocks are listed in descending order of their share price performance. We also added the hedge fund sentiment around each stock which was taken from Insider Monkey’s Q2 database of 912 elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Moderna, Inc. (NASDAQ:MRNA)
Number of Hedge Fund Holders: 39
Year to Date Share Price Performance: -53.07%
Moderna, Inc. (NASDAQ:MRNA) is a significant player in the field of mRNA medicine, having developed innovative treatments and vaccines for various diseases, including infectious diseases, cancer, and rare genetic conditions. Its mRNA platform enabled the rapid creation of Spikevax, one of the earliest COVID-19 vaccines, which has been widely distributed globally.
Its mRNA technology uses the body’s natural protein production system to create tailored treatments by instructing cells to produce specific proteins. This process mimics biological protein creation and offers advantages over traditional medicines.
Moderna’s (NASDAQ:MRNA) stock had an incredible start to the year and was up nearly 50% between the start of the year and May 24. However, the company’s stock started to have a mixed performance afterward due to several reasons. The company experienced a significant drop in its stock price after reducing its revenue outlook during Q2 results, due to decreased demand for its COVID-19 vaccine in Europe and a challenging market in the U.S. factors contributing to this revision were minimal sales in the European Union for 2024, possible delays in international sales until 2025, and growing competition in the U.S. for respiratory vaccines.
Nevertheless, building on the success of its COVID-19 vaccine, Moderna (NASDAQ:MRNA) is developing a broad pipeline of several programs that span infectious diseases, cancer, autoimmune conditions, and rare diseases. Over the next five years, it aims to launch up to 15 new products, including vaccines for COVID-19, flu, and RSV, along with therapies targeting latent viruses, cancer, and rare diseases.
Moderna’s (NASDAQ:MRNA) recent R&D Day highlighted the strategic prioritization of its mRNA pipeline, with an emphasis on respiratory and non-respiratory vaccines. The company announced that five respiratory vaccines have achieved positive Phase 3 results, with three expected to be submitted for approval in 2024.
The company is also advancing five non-respiratory products in studies across cancer, rare diseases, and latent vaccines, aiming for approvals by 2027. The company’s R&D success rate is notably higher than the industry average, with a combined probability of success in mid and late-stage development at 66%. However, the company plans to reduce its annual R&D spending by about $1.1 billion starting in 2027, as it focuses on its late-stage pipeline, including cancer vaccines and therapies for rare diseases.
Moderna (NASDAQ:MRNA) is shifting focus to oncology and rare disease therapeutics, expecting 2025 revenues between $2.5 and $3.5 billion. It plans to achieve break-even by 2028 with sufficient capital to fund operations without raising new equity as it has $10.8 billion in cash reserves as of Q2 2024.
Overall, MRNA ranks 3rd on our list of worst performing stocks in the S&P 500. While we acknowledge the potential of MRNA as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MRNA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.