Over 40 years’ heritage
185,800 clients worldwide
Over 15,000 markets

Top S&P 500 Stocks to Watch

After hitting an intra-day high of 2187, the S&P 500 pulled back as oil prices began to sell off again.

bg_us stocks earnings season 4
Source: Bloomberg

Volumes have been very low as investors seem to be waiting for major market catalysts. And in this much lower volatility environment, investors have been hitting the exit on previously much sought after stocks in the utilities and telecoms sectors.
 

Top 15 Winners and Losers

The much unloved Endo International surged after a major earnings beat yesterday. The stock has consistently underperformed analyst expectations, so it was ripe to see a big rally after fulfilling some of its promise in its earnings release. Despite First Solar beating earnings expectations, their guidance still hurt investors hoping for a dramatic pick up in 2017. Bristol-Myers Squibb also saw their shares plummet after they announced that a trial for their once promising lung cancer drug Opdivo had failed on Friday.

NAME

5 Day

1 Month

YTD

NAME

5 Day

1 month

YTD

ENDO INTERNATION

29.5

36.9

-63.8

FISERV INC

-4.8

-0.6

13.9

BALL CORP

14.3

13.4

10.1

DAVITA HEALTHCAR

-4.9

-3.1

3.7

EOG RESOURCES

13.1

10.6

27.7

TRACTOR SUPPLY

-5.1

-9.0

0.3

MARATHON OIL

11.8

-2.4

14.5

AMERICAN WATER W

-5.3

-5.3

30.1

NEWFIELD EXPLORA

11.0

7.6

41.6

DENTSPLY SIRONA

-5.4

1.0

0.5

DEVON ENERGY CO

10.5

10.9

24.7

PATTERSON COS

-6.0

-1.0

1.7

MICROCHIP TECH

10.3

22.8

30.3

NRG ENERGY

-6.8

-9.6

9.0

MURPHY OIL CORP

9.7

-6.2

25.7

SCRIPPS NET-CL A

-7.6

2.2

11.3

CIMAREX ENERGY C

9.6

11.1

43.1

HENRY SCHEIN INC

-8.6

-3.9

4.0

TRANSOCEAN LTD

9.6

-0.3

-11.1

IRON MOUNTAIN

-9.2

-4.7

36.1

AMERICAN INTERNA

9.5

19.0

-4.4

CF INDUSTRIES HO

-9.7

-8.1

-45.8

MICRON TECH

8.1

11.5

2.3

QORVO INC

-11.3

3.3

7.1

CERNER CORP

8.0

21.5

11.2

TRIPADVISOR INC

-12.0

-0.1

-28.3

MOTOROLA SOLUTIO

7.9

16.6

8.5

FIRST SOLAR INC

-12.8

-10.2

-36.9

PARKER HANNIFIN

7.9

19.1

25.7

BRISTOL-MYER SQB

-17.9

-14.4

-10.4

 

Sector Performance

Financials have continued to see buying in the wake of the second back-to-back month of strong payrolls data. The recovery in the spot oil price after its more than 20% decline has also seen investors pile back into energy stocks in a big way, but the sector is still down on the month. The much lower volatility is also seeing investors cut out of utilities stocks with renewed vigour.

Sector

5  Day Return

1 Month Return

YTD Return

IT

2.2

7.7

8.5

Utilities

-2.3

-3.7

16.9

Healthcare

-0.8

1.6

3.7

Industrials

1.5

1.6

9.2

Financials

2.8

4.9

0.7

Consumer Staples

0.0

-2.0

8.0

Telecoms

-0.3

-1.3

19.7

Materials

0.8

3.7

11.5

Consumer Disc.

0.6

0.5

3.5

Energy

3.2

-0.7

12.7

SPX Index

1.1

2.4

6.7

 

Factor Performance

A similar story looks to be at play within the factor division of the index with minimum volatility being the worst performing sector of the month, despite it still being the second best performing sector year­-to-date. And in an increasingly highly valued market, investors have been piling into small caps and value stocks as areas of the market that still hold the most upside potential.

Sector

5 Day Return

1 Month Return

YTD Return

Value

1.1

2.3

9.3

Growth

0.6

2.9

5.9

Size

0.8

2.6

8.2

Momentum

0.5

0.9

7.4

Quality

0.8

3.2

5.6

Yield

0.7

1.3

12.9

Minimum Volatility

0.2

-0.4

12.4

Small Caps

1.3

3.8

10.5

Mid Cap

0.7

2.6

8.3

Large Cap

0.9

2.6

7.5

MSCI USA

0.8

2.6

7.6

 

GICS Level 3 Sector Performance

Within the more expansive GICS level three sector breakdowns, it’s clear that utilities as a whole are suffering. Banks are the clearest winners within the financials space. And healthcare technology stocks are really dominating all other areas.

NAME

5 Day

1 Month

YTD

NAME

5 Day

1 month

YTD

S&P 500 HEALTH CARE TECH

8.0

10.4

11.2

S&P 500 HTL RST & LEI IX

-0.2

-0.6

-2.2

S&P 500 RL EST MGMT DEV

5.6

14.2

-13.5

S&P 500 BEVERAGES INDEX

-0.2

-2.1

5.2

S&P 500 CONT & PKG INDEX

5.0

8.2

13.5

S&P 500 Profsnl Services

-0.3

0.1

10.5

S&P 500 BANKS INDEX

4.6

7.5

-6.2

S&P 500 DIV TELE SVC IDX

-0.3

-1.3

19.7

S&P 500 ENGY EQM & SV IX

4.2

2.5

14.3

S&P 500 MULTILINE RET IX

-0.4

0.2

6.6

S&P 500 Tech HW St& Peri

3.9

11.6

5.4

S&P 500 HHOLD PDTS INDEX

-0.5

-0.5

8.3

S&P 500 AIRLINES INDEX

3.8

3.5

-19.7

S&P 500 REITS INDEX

-0.5

0.1

10.6

S&P 500 CAPITAL MRKT IDX

3.7

9.2

-4.9

S&P 500 BIOTECHNOLOGY IX

-1.0

5.8

-5.5

S&P 500 AUTOMOBILES INDX

3.5

-0.2

-7.7

S&P 500 METALS & MNG IDX

-1.2

5.7

58.7

S&P 500 ELECT EQPM INDEX

3.0

3.3

14.9

S&P 500 TOBACCO INDEX

-1.3

-4.9

12.3

S&P 500 OIL GAS C FUEL

3.0

-1.2

12.4

S&P 500 ELECTRIC UTIL IX

-1.7

-3.0

17.5

S&P 500 MACHINERY INDEX

3.0

5.7

20.4

S&P 500 PHARM INDEX

-1.9

-0.6

4.5

S&P 500 CONS FIN INDEX

2.9

5.2

-3.5

S&P 500 IndP&RElectProd

-3.0

-6.8

19.8

S&P 500 INSURANCE INDEX

2.6

2.9

3.3

S&P 500 MULTI-UTIL INDEX

-3.2

-4.4

15.9

S&P 500 Elec, Inst& Comp

2.6

5.6

9.5

S&P 500 WATER UTIL INDEX

-5.3

-6.7

#N/A N/A

Value Screens

The growing concerns over the build-up in gasoline inventories continues to see refiners trade at very low valuations. Valero and United Continental are both trading at some of the lowest valuations in the index according to Tobias Carlisle’s Acquirer’s Multiple.

Stock Ticker

EV (US$ mn)

EBITDA-Capex

Acquirer's Multiple Score

FORD MOTOR CO

34880

8417

4.1

VALERO ENERGY

27629

6582

4.2

HP INC

26512

5929

4.5

GILEAD SCIENCES

102779

22544

4.6

FIRST SOLAR INC

2830

608

4.7

FRANKLIN RES INC

15153

3169

4.8

DELTA AIR LI

32675

6692

4.9

ANTHEM INC

27576

5544

5.0

UNITED CONTINENT

22144

4238

5.2

AMERIPRISE FINAN

17889

3342

5.4

 

Consensus Price Targets

The relief rally in energy stocks after the oil price bottomed has seen Transocean fly way above its consensus price target. Caterpillar also continues to trade well above its consensus price targets after releasing better than expected results and as investor sentiment improves with regards to the outlook for the firm over the coming years.

Stock Ticker

Name

Percentage Above Consensus Target Price

RIG US

TRANSOCEAN LTD

19.9

CAT US

CATERPILLAR INC

14.9

HCP US

HCP INC

13.9

MOS US

MOSAIC CO/THE

11.5

GRMN US

GARMIN LTD

11.3

PAYX US

PAYCHEX INC

10.4

PBCT US

PEOPLE'S UNITED FINANCIAL

10.3

NTAP US

NETAPP INC

10.2

URI US

UNITED RENTALS INC

9.7

TDC US

TERADATA CORP

9.0

 

Momentum Stock Picks

Note: These momentum stock recommendations are based off backtested results looking at a 3 day holding period (momentum signal shorter in S&P 500) with a 5% stop loss on every trade.

ENDP – (Buy)

Endo International saw its stock pop after it beat earnings forecasts and reiterated its outlook for 2017. Investor sentiment has definitely been improving with regards to the US healthcare sector and after what has been a pretty terrible 2016, the stock could be well positioned to see a bit of buying.

MSI – (Buy)

Motorola Solutions continues to rally strongly as sentiment firms up for well-performing tech stocks.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.