The S&P 500 index consists of 500 top American companies that are carefully chosen to represent the cream of the crop. Even though these companies are part of the prestigious index, some are facing struggles despite the index reaching all-time highs. Some S&P 500 stocks have seen a decline of up to 43% from their previous highs.
Instead of following the latest trends, it’s important to understand why these struggling stocks were included in the S&P 500 in the first place. Despite their current challenges, these stocks can still be great long-term investments for your portfolio.
1. Super Micro Computer (NASDAQ: SMCI) recently joined the S&P 500 and specializes in building modular server systems for data centers. The company has experienced significant revenue growth due to the demand for artificial intelligence (AI). While the stock has seen a surge of over 200% in the past year, it has dipped by 31% recently. However, experts believe that sustained investments in data centers will continue to benefit Super Micro Computer in the future.
2. Clorox (NYSE: CLX) is a well-known consumer staples company with popular household products like Clorox, Pine-Sol, and Burt’s Bees. The stock has faced volatility recently, dropping over 40% from its highs. The company faced challenges due to a cyberattack on its supply chain, which impacted its operations. However, analysts expect revenue growth to resume next year, making Clorox a potential buying opportunity for long-term investors.
3. NextEra Energy (NYSE: NEE) is a leader in renewable energy and the largest producer of renewable energy in the world. The company has benefited from the growth of renewable energy in the US and has a strong track record of dividend growth. While rising interest rates have impacted the stock, investors can still expect steady growth from NextEra as renewable energy continues to expand in the US.
Overall, these three S&P 500 companies offer solid long-term potential despite their current struggles. It’s important to consider their strong fundamentals and future growth prospects when making investment decisions.