Lightning doesn’t strike twice with S&P 500 stocks. Or does it?
Seven S&P 500 stocks that at least tripled the index’s gain in 2020, including consumer discretionary L Brands (LB), materials company Freeport-McMoRan (FCX) and industrial Generac (GNRC), are doing it all again already this year so far, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
Such powerful repeat performances are especially noteworthy this year, since it’s so unusual. The S&P 500 is up 10.8% this year. Much of the S&P 500’s strength this year is coming from new contributions from sectors left out of the rally in 2020. The Energy Select Sector SPDR ETF (XLE) is up more than 27% this year. This S&P 500 sector perked up after lagging in 2020, losing a third of its value.
So seeing some S&P 500 stocks show up again with stellar repeat performances makes them exceptional. And they’re also all backed up with strong profit and revenue growth, unlike other speculative plays in the market.
“The S&P 500 continued its advance, recording three new all-time highs while rising 5.3% thus far in April, encouraged by strong global and national economic reports, a decline in the 10-year yield, as well as a much stronger-than-expected advance in (first-quarter) results,” said Sam Stovall, market strategist at CFRA.
The Biggest S&P 500 Winner … Again: L Brands
Tripling the S&P 500 might be tough this year. It was all the more difficult in 2020 amid a pandemic, but health and beauty retailer L Brands is pulling it off.
Last year, shares of the Columbus, Ohio-based retailer surged 105.2%. That was many times higher than the S&P 500’s 16.3% rise in 2020. Investors jumped into the stock in late 2020, hoping to get in early on a recovery.
And now that recovery is here. And investors keep pouring into the stock, which carries a 91 IBD Composite Rating. Just this year, L Brands’ shares are up 77.2%, easily topping the S&P 500’s 10.8% rise.
Analysts think the company will post adjusted profit of $1.4 billion, or $4.92 a share, in the current fiscal year ended in Jan. 2022. If that happens, it would mark more than 40% EPS growth. That’s strong even in a boom year for S&P 500 profit. Meanwhile, L Brands’ revenue in the current fiscal year is seen jumping more than 14% to $13.6 billion.
Freeport-McMoRan Has Makings Of An S&P 500 Rally
Phoenix-based copper and gold miner Freeport-McMoRan continues to outperform in the S&P 500.
Shares of the Big Cap 20 company this year are already up 43.5%, easily topping the S&P 500. But what’s amazing is that this powerful gain comes just a year following a 98.3% rise in 2020.
But this isn’t simply a speculative play, like GameStop (GME) stock. Solid fundamentals underpin the stock’s powerful move higher. And a strong chart paired with robust sales and profit growth explain Freeport-McMoRan’s perfect 99 IBD Composite Rating.
Profit last year jumped 2,600% to an adjusted $790 million or 54 cents a share. Revenue in 2020 slid 1.4% to $14.2 billion. But this year, analysts are looking for a bumper year. Profit is seen jumping 388% in 2021 to $6.4 billion, or $2.64 a share. Revenue in 2021 is expected to jump 48% to $21 billion.
Industrial-Strength S&P 500 Rallies
The industrial sector of the S&P 500 continues to outperform. The Industrial Select Sector SPDR ETF (XLI) is up 13.5% this year. That makes it the third-best sector among the 11 in the S&P 500. Keep in mind the sector was also positive in 2020, gaining 8.7% in 2020.
And for an example of a stellar repeat performance, just look at IBD 50 member Deere (DE). Shares of the Moline, Ill.-maker of farm equipment are up 41.5% — just this year alone. And that’s after thrashing the S&P 500’s gain in 2020 by rising 55.3%. As the 95 IBD Composite Rating shows, there’s profit and revenue to back up the gains.
This year, analysts think the company will make an adjusted $16.03 a share. If that’s correct, it would mark an 84% increase in profit. Meanwhile, Deere’s revenue is expected to jump nearly 10% to $41.9 billion.
Also among industrials is generator maker Generac, led by a top-notch CEO and part of the elite Leaderboard list of top stocks. The stock is up 40.1% in 2021 so far. That’s impressive enough, and partly the reason for its high 98 Composite Rating. But that’s coming off a strong 2020 when the stock jumped 126.1%, landing Generac in the S&P 500.
If you’re wondering if some S&P 500 companies can lead in two very different types of investing climates, now you know encore performances are possible.
S&P 500 Repeat Winners
A handful of stocks tripled the S&P 500’s gain this year so far, after doing it in 2020, too
|Company||Symbol||Stock % ch. 2020||% stock ch. 2021||Sector||Composite Rating|
|L Brands||(LB)||105.2%||77.2%||Consumer Discretionary||91|
|Zebra Technologies||(ZBRA)||50.5%||32.6%||Information Technology||92|
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
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