The year 2014 has been a good one for stocks. Domestic economic strength has boosted the markets, particularly in the second half of the year. However, the year was not without its headwinds. A relatively slower first half witnessed a decline in GDP, caused primarily due to harsh winter weather.

Meanwhile, concerns from foreign markets also made their presence felt. Among other downsides was the plunge in oil prices, which continues to be a cause for concern.  

Economic Data in 1H 2014

A surprise weaker-than-expected US jobs report left investors worried about betting big on equities in January. It was reported in January that nonfarm payroll employment moved up 74,000 in December.

Meanwhile, GDP shrunk 2.9% in the first quarter of 2014. This is the worst performance in five years.

Ebola Scare

After affecting the lives of 8,000 to 9000 people in West African countries, the first U.S. case in Ebola was diagnosed on Sep 30, 2014 in Texas. Share prices of airline stocks trading in the U.S. plunged after the second Ebola case in the U.S.

Leisure companies were also affected and lost significant value over the past few months as a large number of people put their travel plans on hold. Speculations that an Ebola patient could be traveling on the same cruise impacted passenger travel, thereby taking a toll on cruise operators.

Impact of Global Issues

China

Economic data from China were largely on the negative side from the beginning of this year. Additionally, violent confrontation took place between pro-democracy supporters and the Hong Kong government in September. Ultimately, on Nov 21, the People’s Bank of China (PBOC) announced its surprise decision to reduce interest rates.

Russia

An increase in political tensions between Russia and the West over Crimea severely affected markets on certain days, mostly during March-April. Imposition of sanctions by the U.S. intensified such tensions.

Benchmarks suffered their biggest losses in months in July on reports that a Malaysian Airlines passenger jet was shot down near the Ukraine-Russia border. In August, the Russia-Ukraine crisis led to fresh sanctions against Russia.

In response, Russia imposed bans on food imports from Europe and the U.S. In a surprise announcement last Monday, the Central Bank of Russia hiked the benchmark interest rate from 10.5% to 17%. The ruble was down 11% during the day, when the central bank stepped in and announced a significant rate hike.

Europe

Concerns about the European banking system also dragged domestic benchmarks lower in July. Economic data from Europe was dismal in August. However, a recovery plan for Portugal’s banking crisis improved sentiment. Sluggish growth data from the Eurozone dented investor sentiment in September and October.

Japan

Japan’s economy entered a technical recession after GDP declined 1.6% in the Jul-Sep period. Subsequently, the Bank of Japan announced that it will step up asset purchases to 80 trillion yen on annual basis. These announcements led to the Japanese Prime Minister’s call for a snap election in mid-December, two years ahead of schedule.

Middle East

Sectarian clashes in Iraq affected markets on concerns about oil supply disruption. ISIS had captured key towns in Iraq, where Iraq’s biggest oil refinery is located. Violence in Iraq continued to trouble markets in August. In September, the U.S. launched massive air strikes for the first time against militants in Syria. ISIS continues to be a major source of geopolitical tensions.

Oil Price Slump

During the first half of the year, the energy sector gained from tensions in Iraq, as oil prices shot up. Oil prices rose to their highest level in nearly nine months early June.

However, for over six months now, investors have been dealing with plummeting crude prices. The West Texas Intermediate (WTI) crude price lost momentum in June and has since then been showing weakness. Amid the soft oil pricing scenario, the international cartel of oil producers’ – Organization of the Petroleum Exporting Countries (OPEC) – stand against an oil output cut.

Brent crude price has slumped more than 48% since Jun 19. On Dec 16, Brent crude lost 2% to settle at $59.86 a barrel, its lowest level since May 19, 2009. On Dec 11, WTI Crude Oil had slumped 1.7% to settle at $59.95, its first drop below the $60 mark in five years.

Stocks That Could Soar in 2015

Ultimately, the year’s positives have outweighed the headwinds and stocks are poised to make stronger gains next year. Below we present five stocks which lost heavily this year. However, their favorable Zacks Rank and estimate revisions mean that they are poised to do far better next year:

Regado Biosciences, Inc. (RGDO - Snapshot Report) operates in the biopharmaceutical domain. The company focuses on the discovery and development of antithrombotic drug systems for acute and sub-acute cardiovascular and other indications. Regado is spearheading efforts to discover and develop two-component drug systems. This is made up of a therapeutic aptamer and the associated specific active control agent.

Regado holds a Zacks Rank #1 (Strong Buy) and has lost nearly 82% year to date. The stock has seen 1 positive revision in the last 30 days for next year estimates. Consensus estimate for next year has improved from a loss of $1.03 a share to a loss of 77 cents.

Allied Nevada Gold Corp. (ANV - Snapshot Report) produces gold and silver and focuses on development, exploration and mining of property located in Nevada. Allied Nevada operates the Hycroft Mine. Located 54 miles west of Winnemucca, Nevada, the gold and silver mine operates using open-pit heap leaching.

Allied Nevada holds a Zacks Rank #1 (Strong Buy) and has lost 74.1% year to date. The stock has seen 1 positive revision in the last 30 days for next year estimates. Consensus estimate for next year has improved from a loss of 35 cents a share to a loss of 33 cents.

Mechel OAO (MTL - Analyst Report) is one of Russia’s leading mining and metallurgical companies, producing coal, iron ore, nickel steel, rolled steel products and hardware. Headquartered in Moscow, the company conducts business through a number of subsidiaries. Apart from Russia, Mechel operates facilities in Romania and Lithuania.

Mechel OAO holds a Zacks Rank #2 (Buy) and has lost 69.7% year to date. The stock has seen 1 positive revision in the last 30 days for next year estimates. Consensus estimate for the year has improved from a loss of $1.74 a share to a loss of 19 cents.

Neonode, Inc. (NEON - Snapshot Report) is a developer and licenser of optimal multi-touch solutions and user interface solutions. Neonode’s MultiSensing technology is embedded into handheld devices and touchscreens by Original Equipment and Original Design Manufacturers. The company is based out of Stockholm, Sweden.

Neonode holds a Zacks Rank #2 (Buy) and has lost 60.4% year to date. The stock has seen 1 positive revision in the last 60 days for next year estimates. Consensus estimate for next year has improved from a loss of 16 cents a share to a loss of 13 cents.

The Container Store Group, Inc. (TCS - Snapshot Report) operates as a specialty retailer of storage and organization products. Container Store has two operating segments, TCS and Elfa. TCS includes its retail stores, call center and website. Elfa is the designer and manufacturer of shelving and drawer systems that are component-based. The Container Store Group is headquartered in Coppell, Texas

The Container Store Group holds a Zacks Rank #2 (Buy) and has lost 59.2% year to date. The stock has seen 1 positive revision in the last 60 days for next year estimates. Next year’s earnings consensus estimate has improved from 59 cents a share to 61 cents.

Outlook for 2015

Next year looks to be an even better one for stocks. Domestic GDP and employment numbers continue to improve. Additionally, stimulus measures in the Eurozone, Japan and China have increased hopes of a possible revival.

Meanwhile, the Fed has indicated that it will be “patient” before undertaking a possible rate hike. Oil prices continue to be a cause for concern. But there are indications that lower energy prices will lead to higher purchasing power for the consumer.

Overall, 2015 looks to be a better year for the markets. With their impressive Zacks Rank and estimate revisions, these stocks would make for prudent additions to your portfolio.