Illustration by Melanie Lambrick
Illustration by Melanie Lambrick

The Story of the Stock Market, Told by Five Companies

Wealthsimple makes powerful financial tools to help you grow and manage your money. Learn more

For more than a decade, high-growth stocks soared. But when the era of easy money ended that trend reversed quick, with profitable, slower-growth companies suddenly outperforming speculative investments. Here are five stocks that tell that and the market’s other prevailing narratives this quarter.

Recommended for you

  • Weed Is Still (Relatively) Cheap! And Four Other Stories of Non-Inflation

    Money & the World

  • Why Does Everyone Care About Commodities All of a Sudden?

    Money & the World

  • End Times for Tech Stocks?

    Money & the World

  • The Story of the Stock Market, Told by Five Companies

    Money & the World

MEET WEALTHSIMPLE

Wealthsimple is a new kind of financial company

Invest, trade, save, spend, and even do your taxes in a better, simpler way.

inline cta

THE PANDEMIC UNICORN Peloton ($PTON) wasn’t the only company that did a boom-and-bust pandemic cycle, but its tumble has been the most Icarus-like, with its stock down an apocalyptic 90% since this time last year. Like other pandemic darlings (👋Shopify), it benefitted big time from customers stuck at home with extra cash. But, when life returned to normal-ish, sales slumped as costs skyrocketed. Other pandemic favourites have suffered similarly: Wayfair is down 91% from its pandemic high. Zoom: -87%. Docusign: -85%. In May, Peloton reported a US$757 million loss.

THE TECH GIANT Meta ($META) rode a wave of growth and cheap money to glory: from May 2012 to September 2021, its stock climbed a bananas 1,180%. Then digital advertising slumped, thrusting Zuck & Co. into a strange new, less profitable world. As a result, $META is down a painful 62% YTD. And tech stocks have tanked broadly. The ARK Innovation fund — deep on Tesla, Roku, Spotify — sits -77% from its peak, and the tech-heavy Nasdaq (-34% YTD) lags the other major indices. Why? Basically, higher interest rates slow growth, and growth is tech’s entire MO. Higher rates also incentivize investing in companies that spit out a lot of cash, and tech companies aren’t famous for that. Meta is now c̶u̶t̶t̶i̶n̶g̶ ̶c̶o̶s̶t̶s shifting vibes.

THE NEW VALUE STOCK Apple ($AAPL) is a tech company in that it makes gadgets and apps, etc. Yet it rakes in cash (it generated US$23 billion in free cash flow last quarter) and has strong margins and loyal customers to boot. These qualities, some argue, resemble those of a value stock. For the uninitiated: value stocks (think: oil or banks) don’t necessarily grow like crazy and for that reason tend to be undervalued. But for the price they’re reliable moneymakers and thus relatively resilient. Value stocks have fallen 17% YTD, compared to the more precipitous drop of growth stocks, which have slid about 35%. Apple has split the difference, sinking only (“only” being relative in ’22) 23% YTD.

THE ENERGY EMPIRE Suncor ($SU), in normal times, would likely be reeling right now, after a boardroom shake-up and the resignation of its CEO. But normal times these are not. A global energy crunch, courtesy of Russia’s war against Ukraine, means energy companies basically can’t go wrong. Suncor’s stock, shake-ups be damned, is up 36% YTD. Surging commodity prices have placed Canadian oil and gas companies squarely among the TSX’s top performers, and industry watchers say demand is likely to stay high at least in the short term.

THE MEMESTOCK Bed Bath & Beyond ($BBBY) shot up in early 2021 during the first big memestock fever. $BBBY’s wild ride, like so many speculative investments’, should have ended when rates rose and markets retreated. And yet August saw a memestock revival, during which $BBBY (briefly) shot up 300%. Like meme hysterias of yore, the frenzy, which also included r/wallstreetbets mainstays $GME and $AMC, was basically driven by hype and Reddit chatter. But this time, the energy just wasn’t the same, and BBBY stock is now trading about 70% lower than where it started the year. (GME and $AMC crashed back to Earth too.)

Sarah Rieger is a news writer for Wealthsimple Magazine. She was previously a staff writer and editor at CBC News and HuffPost Canada. You can reach her at srieger@wealthsimple.com, or on Twitter at @sarahcrgr.

The content on this site is produced by Wealthsimple Media Inc. and is for informational purposes only. The content is not intended to be investment advice or any other kind of professional advice. Before taking any action based on this content you should consult a professional. We do not endorse any third parties referenced on this site. When you invest, your money is at risk and it is possible that you may lose some or all of your investment. Past performance is not a guarantee of future results. Historical returns, hypothetical returns, expected returns and images included in this content are for illustrative purposes only.

Money + the World

"BURNOUT HAS BECOME OUR BASE TEMPERATURE. WE’RE THE BURNOUT GENERATION."

Anne Helen Petersen explains how things are different for the generation the world seems to love to hate.

subscribe

Get the best stories from our magazine every month

Sign up for our email newsletter

  • Money & the World

    Why Do We Think Stock Markets Will Go Up Over Time, Anyway?

    Maybe it's time to talk about how markets work, and why we think they're the best way to invest for the long term. We promise: it's super simple and will make you 17% smarter about money.

  • Money & the World

    Is Netflix Still a Growth Stock Now? And Other Streaming Wars Questions Answered

    Some video-subscription services, like Netflix, are struggling — and finally facing real competition.

  • MEET WEALTHSIMPLE

    A new kind of financial company

    Invest, trade, save, spend, and even do your taxes in a better, simpler way.

    see-more cta
  • Money & the World

    “The Richest People on the Planet are Criminals”

    And other insights from Jay Newman, the hedge fund insider turned novelist who has some unique insights into the darker corners of the world of finance.

  • Money & the World

    How Tribalism Affects What We Do With Money

    Professor, social scientist and author of “The Power of Us” Jay Van Bavel on how who we are, and how we behave, is formed by the groups we belong to — or are told we belong to.

MEET WEALTHSIMPLE

A new kind of financial company

Invest, trade, save, spend, and even do your taxes in a better, simpler way.

GET STARTEDright arrow icon

Our best stories, once a month.

Sign up for our newsletter

The content on this site is produced by Wealthsimple Technologies Inc. and is for informational purposes only. The content is not intended to be investment advice or any other kind of professional advice. Before taking any action based on this content you should consult a professional. We do not endorse any third parties referenced on this site. When you invest, your money is at risk and it is possible that you may lose some or all of your investment. Past performance is not a guarantee of future results. Historical returns, hypothetical returns, expected returns and images included in this content are for illustrative purposes only. By using this website, you accept our (Terms of Use) and (Privacy Policy). Copyright 2023 Wealthsimple Technologies Inc.