Are these five beaten Nasdaq shares ready to rise in 2021?

Over the past year, the Nasdaq Composite Index has risen 45%. Most gains can be attributed to stocks that performed well in the stay-at-home and remote work environments of the COVID-19 pandemic.

There are many Nasdaq stocks that did not come close to the performance of the overall index, especially due to pandemic-related industry disruptions. However, some may be ready to pull together once the pandemic comes to an end. Here are five in particular for setting up your radar.

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5 Nasdaq stocks that underperformed

There are literally hundreds of Nasdaq stocks underperforming. By definition, it is approximately that half of all stocks underperform and half perform better. But here are five that have performed particularly poorly in the past year and for good reason, along with the performance of the S&P 500 and Nasdaq Composite benchmark indices.

Data source: Ycharts. Returns from 2/1/2021.

Why have these stocks performed so poorly?

As mentioned earlier in the table, all of these reasons underperformed for good reasons. And this is not surprising, it is mostly due to the pandemic. To briefly deduce the reasons:

• Lamar Classifieds invest in billboards and other outdoor advertising structures, in particular display ads in transit systems. Because fewer people have traveled and traveled to work in the past year or so, many companies have pumped the brakes on the outdoor pool for advertising money.
• Marriott International run hotels around the world, and it’s not hard to figure out why it was not a great venture during the pandemic. In many cases, hotels operate at a small fraction of their occupancy before pandemics.
• Wynn Resorts owns resorts in Las Vegas and Macau, among others. Casinos had to close in the early days of the pandemic, and although most have reopened, leisure trips are nowhere near normal levels.
• Caretrust REIT is a real estate investment trust owned and operated by competent nursing homes, whose residents have been dramatically affected by the pandemic. Senior withdrawals have not recovered and are unlikely to return to pre-pandemic levels for some time.
• Dave & Busters run family entertainment centers. Many have reopened, but there are quite a few that are still closed, including almost all of its locations in New York and California.

Will they perform better in 2021 and beyond?

The point is that these five companies have been hit hard by the COVID-19 pandemic, but that they could also benefit greatly from it, as things (hopefully) will start to return to normal in 2021. people want to work in offices at least part-time, which would be good news for the outdoor advertising industry.

Recreational travel has also taken up quite a bit since the early days of the pandemic. As the effect of the vaccine increases, it should only continue to increase. Many families lie low during the winter season, but there is a lot of pent-up demand for family entertainment centers like the ones Dave & Busters offers. Last but certainly not least, although the senior housing industry certainly takes some time to normalize, the older age groups are still growing rapidly, so it should be a long-term growth industry for decades to come.

The bottom line is that some of the companies most affected by the pandemic may be long-term bargains for patient investors. I can not say with 100% certainty that it will all increase in 2021, although I think it is likely that they will all get a lift once the numbers of the pandemic start to drop. But all are well-run businesses that need to have a good future, so it can be smart stocks to consider for your portfolio while still performing poorly.