12 stocks get crushed for good reason

It's easy to write off the market's recent turmoil as just "speculative noise" or "normal volatility." But there's a good reason why some stocks are getting crushed — a reason that will be painfully clear to investors soon.

There are 12 stocks in the Standard & Poor's 500 that have cratered 50% or more this year — including coal and energy firm Consol Energy (CNX), casino operator Wynn Resorts (WYNN) and single-coffee brewer Keurig Green Mountain (GMCR) — where investors are bracing for back-to-back quarterly profit drops at the end of the year. Investors expect adjusted quarterly profits at these companies to fall in both in the third and fourth quarters, and some of the declines are expected to be massive, according to a Paste BN analysis of data from S&P Capital IQ.

Some investors are trying to explain away the market's ongoing struggles. The S&P 500 is down 5.8% this year and off 9% from its highest point of the past 52 weeks — putting it just barely out of correction territory. It's easy to simply write off the declines as a result of speculation and short-term trading.

But there's more going on. There are some real fundamental reasons for big stock declines at companies such as Consol. Shares of the company are down 67.4% this year — and down 74% from their 52-week highs. That might sound extreme until you hear that analysts expect the company's profits in the third and fourth quarter to be 59% lower than they were in the same periods a year ago. That hurts.

Five of the of the 12 stocks getting hammered are energy firms. It's understandable given the oil price destruction. The implosion of Asian gaming revenue is whacking Wynn Resorts with a vengeance. Shares of the gaming giant are down 59% this year and 69% from their 52-week highs. Investors are braced from some tough earnings reports the next two quarters. Adjusted profits are expected to fall 50% in the third quarter and 29% in the fourth, says S&P Capital IQ. All told, profits during the two periods are seen dropping 42% from year-ago levels.

Some of the fundamental deterioration is hitting some stocks that were hot but that have since gone cold. Keurig Green Mountain was one of the top Nasdaq stocks during the bull market. But now the stock is down 58% this year and down 65%  from the 52-week highs. Part of the hit is from speculators bringing the valuation down on the stock, but there are fundamental issues, too. The company's adjusted profits are seen falling 21% in the third quarter and 12% in the fourth.

Could investors be worrying about nothing? Certainly. The analysts' expectations could be overly pessimistic — leading to over-dramatic declines in the stock prices. And some of the earnings declines are the result of corporate restructurings. Shares of utility NiSource are down - as well as expected profit, due to the company's decision to spin off its Columbia Pipeline Group. However, NiSource investors got one share of Columbia for every share of NiSource they owned. Adjusted for the spinoff, shares of NiSource are up 4% this year. Similarly, healthcare company Baxter spun off its Baxalta biotech unit.

But at least, with each of these companies, it's clear why the shares are falling. And it's not just blind speculation. why investors are concerned.

S&P 500 STOCKS DOWN 50% OR MORE THIS YEAR - WHERE EARNINGS ARE EXPECTED TO FALL IN THIRD AND FOURTH QUARTERS

COMPANY, SYMBOL, YTD % STOCK, % CH. EPS EXPECTED

Consol Energy, CNX, -67.4%, -59.2%

Joy Global, JOY, -66.1%, -61.2%

Chesapeake Energy, CHK, -61.3%, N/A

Wynn Resorts, WYNN, -59.5%, -42.4%

NiSource, NI, -58.9%, -41.5%

Keurig Green Mountain, GMCR, -58.4%, -16.5%

Micron Technology, MU, -57.7%, -57.2%

Freeport-McMoRan, FCX, -57.2%, -68.9%

Southwestern Energy, SWN, -51.2%, -89.3%

Baxter International, BAX, -51.2%, -77.8%

Ensco, ESV, -51.1%, -58.8%

Murphy Oil, MUR, -50%, N/A

Source: S&P Capital IQ, Paste BN