I was looking at a portfolio that I manage and was struck by some of the metrics.  While the account is up over 20% YTD (it is balanced 60/40 Stocks and Bonds), the current median equity return YTD for the 14 stocks in the account is -11%.  Long story short, I have had a lot of turnover this year and have picked up some stocks, especially in the Healthcare sector, that have lagged over the past few months or even quarters.  As always, I disclose these holdings on my website. 

This morning, I decided to look purposefully for stocks that are down this year after having a strong relative year last year.  There are lots of reasons to be out of sync with the market, but sometimes it's just mean reversion at play.  I took the Russell 3000 and found that 22% of the members are down over 10% this year.  Of that group, 253 were down less than 10% in 2008.  I wanted to make sure that these were companies with good balance sheets (net debt to cap <0) and earning profits (PE <30), so I constrained those areas.  I also decided to kick out any stocks down 40% or more this year to avoid stepping into a falling knife situation.  Here is what I got, sorted by sector:

As you can see, most of these companies are relatively small.  From my own experience with a few of these names, they are good companies but they should have fallen more last year.  Perhaps they benefited from fundamentals being slow to deteriorate, or perhaps they were just the beneficiaries of crowding in and momentum due to lack of downside or perceived upside.  In some cases, the bad news certainly came late.  In any event, the smaller the stock, the more likely it is to diverge from equilibrium, so it's good to see so many small-caps make this list.  It's also interesting that 7 of the 10 economic sectors are represented.