The rising market during the past several months has helped boost virtually every portfolio. Yet without the wind at your back, marking steady gains becomes that much more challenging. Indeed, April represents the first weak month for the market in quite some time. With the exception of a very tiny pullback in November, the market had been rallying for much of the past six months.
Yet market pullbacks bring fresh opportunity because some individual stocks can take really deep hits if they don't have a rising broader market to support them. Consider this item: 16 stocks fell at least 30% in April (among companies with at least $250 million in market value). That's the largest group since September.
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To be sure, most of these plunging stocks deserve the lambasting they've gotten. Netflix (Nasdaq: NFLX), for example, looked vastly overvalued when the month began. After a recent sharp pullback, shares still look overvalued, as I've noted in this article.
And it should be no surprise to see Groupon (nasdaq: GRPN) and Zynga (Nasdaq: ZNGA) on this list. These companies were so richly valued this past winter that they had only way to go -- down.
For that matter, the ongoing troubles at Clearwire (Nasdaq: CLWR) should have never led to a temporary rebound in the first place. Though I initially suggested shorting this wireless services provider when it traded above $6 back in the summer of 2010, my suggestion this past October to keep shorting the stock has been more challenging.