S&P 500: Brutal bear market hits 7 major stocks below $3 per share

There’s nothing like a bear market to remind S&P 500 investors just how low stocks can go. And that’s a surprisingly low number per share in some cases.




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Seven stocks in the broad S&P 1500 Index, which includes small and mid-sized companies in addition to the S&P 500, have now plunged below 3 per share each as the market falls into a bear market, according to an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. Some of the hardest hit stocks include the real estate company Diversified health care Trust (DHC), manufacturer of cash dispensers Diebold Nixdorf (DBD) and office logistics company pitney-bowes (PBI).

Such massive declines in stock values ​​to such low levels indicate the kind of strain some poorly positioned companies find themselves in now that the Fed and the economy are turning more hostile.

“We are now in another phase of the ongoing bear market downturn,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. But that masks a lot of the worst evils of this market.

S&P 500: Share prices fall

If you’re wondering how much the S&P 500 is under stress, consider the depth of the declines this month. The average S&P 500 stock is now down 19% this year.

Since the S&P 500 is overweight the big companies that have fallen the most, the S&P 500 itself is down more than 22% this year. This puts the market in bearish territory. And you’re also starting to see the per-share prices of some large-cap S&P 500 companies getting uncomfortably low. Communication equipment manufacturer Lumen Technologies (LUMN) is now the lowest stock in the S&P 500, trading at 8.09 per share. This is a drop of almost 36% this year.

But you see much more dramatic implosions within the S&P 1500.

Close to Penny Stocks now

Selling is happening so quickly in the markets that some old big companies are on the verge of being penny stocks.

Take the example of the Diversified Healthcare Trust. The real estate company which owns properties for the elderly now trades at just 1.14 per share. That’s a crushing drop of 63% this year. Why are investors selling these stocks so hard? It’s all about fundamentals. This year, adjusted earnings are expected to drop nearly 90%. But it’s getting worse. The company is expected to lose 75 cents per share in 2023. And investors have little patience for losses in this market.

And ironically, a company that makes machines that dispense dollar bills is now trading for just a few dollars. Shares of Diebold Nixdorf are down more than 70% this year to 2.68 per share. The company’s business is affected by the increase in non-cash digital payments. And we also see it tipping towards a loss of 32 cents per share this year.

Don’t forget Pitney Bowes, once a formidable player in the shipping and office supply industry. Stocks are down more than 60% this year. This drops its value per share to just 2.46. The business is in steady decline. Adjusted earnings per share are expected to fall nearly 38% this year.

More S&P 500 sub-$3 companies to come?

If the S&P 500 continues to tumble, it’s only a matter of time before you see more low-priced stocks in the index. And the ones you see in the S&P 500 are just the start.

“Troubling market volatility is going to be here for a while as Wall Street significantly lowers its year-end S&P 500 targets,” said Edward Moya of Oanda. “A hard landing is becoming the base case for many, which means more economic hardship and a much weaker stock market are ahead.”

S&P 1500 stocks are trading at less than $3 per share

Company Symbol Index Closing price on September 23 Stock YTD % ch. Sector
Diversified health care (DHC) S&P600 1.15 -63.1% Immovable
Gannet (GCI) S&P600 1.99 -62.7 Communication Services
New York Mortgage Trust (NYMT) S&P600 2.37 -34.7 Finance
Community health systems (CYH) S&P600 2.38 -81.6 Health care
pitney-bowes (PBI) S&P600 2.65 -62.9 Industrial
Diebold Nixdorf (DBD) S&P600 2.75 -70.4 Computer science
Franklin Street Properties (PSF) S&P600 2.84 -52.4 Immovable
Sources: IBD, S&P Global Market Intelligence

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