UPS and Hormel: Are These S&P 500 Losers Ready for a Comeback?

Who says you can't make a comeback? UPS and Hormel, two giants of the S&P 500, have been left for dead by investors since early 2022, with shares plummeting over 55%. But here's a contrarian take: they're setting the stage for a revival.

The Case for a Turnaround

UPS, the package delivery juggernaut, made some big moves in 2025. The company shuttered 93 buildings, rolled out automation at 57 locations, and overhauled its distribution network. These moves weren't just for show. They saved UPS a staggering $3.5 billion. But what's even more significant is UPS's decision to cut back its reliance on Amazon, a high-volume yet notoriously low-margin customer. This not only diversifies its revenue but also improves its margin profile.

Hormel, known for its beloved brand of canned meats, is also in the midst of a transformation. The company has been branching out into healthier and more sustainable options, diversifying its product line beyond SPAM. This isn't about nostalgia. it's about meeting new consumer demands and staying relevant in a shifting food space.

But What Could Go Wrong?

There's no such thing as a sure bet. For UPS, the heavy lifting might have short-term costs that could pinch profits. Automation and building closures sound great on paper, but they're expensive and disruptive to implement. There's also competition to consider. With FedEx and others upping their game, UPS isn't in the clear yet.

Hormel faces its own set of challenges. The food industry is fiercely competitive and consumer tastes can be fickle. While Hormel's pivot to healthier options is promising, it's hardly guaranteed to succeed. They could easily end up trapped between new competitors and their traditional customer base.

My Take: Time to Go Against the Grain

Here's the thing. Markets are driven by sentiment as much as by fundamentals. Everyone agrees these stocks are doomed. That's the problem. When the crowd panics, I sharpen my pencil. UPS and Hormel have made real, tangible moves to improve their operations and market positioning. The consensus trade is crowded on the short side, which can present opportunities for those willing to look in the other direction.

So, what's the takeaway here? If you're the adventurous type who doesn't mind a little risk, betting against the consensus could be a winning play. Both UPS and Hormel are down, but I wouldn't count them out just yet. What if the opposite is true and they're preparing for a surprising upswing?