10 Best Stocks In the S&P 500 So Far

Some gains look sustainable, others can't last, but these are the S&P 500's biggest movers so far in 2016

It has been a rocky year for the stock market in general, with the benchmark S&P 500 index only recently fighting back into the black after steep declines to start 2016.

quarterly review and outlookBut for some investors holding some of Wall Street’s top performers, it has been a mighty good year. A handful of select picks have seen returns of 30%, 40% even 50% since Jan. 1.

Many of these stocks are names that deteriorated across 2015, and only recently have seen a rebound in shares. Several are energy companies that have been suffering under falling oil and gas prices. Several more are retailers that have been punished by the rise of e-commerce, as well as strategic missteps. But all have seen a big bounce that coincided with the start of a new year.

Where these picks go from here is anyone’s guess, given all the uncertainty at home around the Federal Reserve and interest rates, not to mention the risk of trouble abroad — including a slowdown in China and Brazil’s worst recession in roughly a century.

But if you’re looking for the winners so far, here’s the list of the 10 best stocks among the S&P 500 companies right now.

Best S&P 500 Stocks: No. 10 — Macy’s, Inc. (M)

  • Market Cap: $14 billion
  • Sector: Retail
  • 2016 Performance: +26% vs. +1% for the S&P 500

Department store chain Macy’s Inc. (NYSE:M) struggled mightily in the second half of 2015 as the company missed big on Q2 earnings and lowered its outlook and plummeted to its lowest share price since 2012.

However, hopes of a turnaround were sparked in part by a spate of store closings and layoffs that should boost profitability. Furthermore, an abysmal holiday quarter to finish 2015 has many investors thinking things can’t get much worse.

As with other rebounding retail names on this list, the future remains uncertain — so investors shouldn’t necessarily think outperformance since January will continue in 2016.

Best S&P 500 Stocks: No. 9 — Cabot Oil & Gas Corporation (COG)

  • Best S&P 500 Stocks: No. 9 -- Cabot Oil & Gas CorporationMarket Cap: $11 billion
  • Sector: Oil & Gas Exploration
  • 2016 Performance: +28% vs. +1% for the S&P 500

Cabot Oil & Gas Corporation (NYSE:COG) is the first of several once-battered commodity stocks that have seen a resurgence in 2016.

Unlike other energy development and exploration companies, Cabot has managed to operate at or near profitability despite the crash in oil and gas prices over the last year. Also with total debt of roughly $2 billion on a market cap of about $11 billion, its borrowing ratio is much healthier than other stocks that are facing a credit crunch.

Time will tell if this is anything more than a short-term snap back now that crude oil prices have stabilized, but for now COG is looking good.

Best S&P 500 Stocks: No. 8 — Exelon Corporation (EXC)

  • Exelon Corporation EXC stockMarket Cap: $33 billion
  • Sector: Electric Utilities
  • 2016 Performance: +28% vs. +1% for the S&P 500

You don’t normally see a sleepy utility company as one of the top performers in the S&P 500. However, Exelon Corporation (NYSE:EXC) was navigating a rather troublesome merger proposal with Pepco Holdings, Inc. (NYSE:POM) that was in danger a few months ago as a top U.S. agency urged regulators to reject the deal in December.

Exelon shares slumped quickly on that news, but after some more hearings and finagling, the deal ultimately was approved and EXC stock recovered. It just happened to be around the start of a new year, giving Exelon a great return since Jan. 1.

But don’t expect that kind of outperformance to continue in this utility stock — even if a merger will ultimately yield long-term benefits.

Best S&P 500 Stocks: No. 7 — PVH Corp (PVH)

  • Market Cap: $8 billion
  • Sector: Apparel
  • 2016 Performance: +33% vs. +1% for the S&P 500

PVH Corp (NYSE:PVH) may not be a household name, but its flagship brands including Calvin Klein and Tommy Hilfiger certainly are.

Additionally, PVH also has licensing agreements with third-party brands of note including DKNY and Nautica.

The stock had been rising nicely in 2016 on general strength for the consumer discretionary sector and hopes for a solid earnings report, and those feelings were validated by its fourth earnings beat in a row this March.

Best S&P 500 Stocks: No. 6 — Range Resources Corp. (RRC)

  • Best S&P 500 Stocks: No. 6 -- Range Resources Corp. (RRC)Market Cap: $5 billion
  • Sector: Oil & Gas Exploration
  • 2016 Performance: +34% vs. +1% for the S&P 500

With weak energy prices, exploration firms like Range Resources Corp. (NYSE:RRC) have been in a bad way lately. After all, if it costs big money to extract fossil fuels from the ground but you only make a pittance selling that oil and gas, there’s little you can do to make things better for your business.

However, RRC is in better shape than many exploration companies out there given its comparatively lower debt levels to some peers.

Sure, it is still deeply unprofitable, but big natural gas reserves coupled with cost cutting and smart hedging against low energy prices seems to have won over some investors. The outlook is far from rosy, however, as low energy prices seem to be persistent and will keep RRC troubled for some time.

Best S&P 500 Stocks: No. 5 — Wynn Resorts, Limited (WYNN)

  • Market Cap: $10 billion
  • Sector: Hotels & Resorts
  • 2016 Performance: +36% vs. +1% for the S&P 500

Casino operator Wynn Resorts, Limited (NASDAQ:WYNN) made some aggressive bets on China, with construction of new facilities in the gaming mecca of Macau adding big debts to the balance sheet. However, with a regulatory crackdown and a slowing Chinese economy in recent years, WYNN has been under pressure in a big way.

Shares bottomed out at the end of 2015 and early 2016, however, and have been recovering after better-than-expected Q4 earnings in February and hopes of a turnaround.

Best S&P 500 Stocks: No. 4 — Michael Kors Holdings Ltd (KORS)

  • Market Cap: $10 billion
  • Sector: Apparel
  • 2016 Performance: +42% vs. +1% for the S&P 500

High-end apparel company Michael Kors Holdings Ltd (NYSE:KORS) saw a phenomenal run after its IPO at the end of 2011, and then a phenomenal flop from a high of nearly $100 a share in 2014 to a low of just under $35 to start this year.

Now, the mojo is back for this volatile consumer company, however, with shares up impressively in 2016 after Q4 earnings in February surprised Wall Street and resulted in a more than 20% gain in a single session.

Fashion can be fickle, so the future is uncertain, but for now KORS is looking good.

Best S&P 500 Stocks: No. 3 — Urban Outfitters, Inc. (URBN)

  • Market Cap: $4 billion
  • Sector: Retail
  • 2016 Performance: +45% vs. +1% for the S&P 500

Retailer Urban Outfitters, Inc. (NASDAQ:URBN) is another rebound play that had fallen on hard times but recently has seen a rebound. From early 2015 through early 2016, URBN stock fell dramatically from a high around $47 to a low around $20.

But if disappointing earnings and slowing momentum were bad for the stock last year, the exact reverse has been true this year as URBN soared over 17% in one day on a big earnings beat just a few weeks ago.

Best S&P 500 Stocks: No. 2 — Newmont Mining Corp (NEM)

  • Market Cap: $14 billion
  • Sector: Metals & Mining
  • 2016 Performance: +48% vs. +1% for the S&P 500

After growing its top line for the first time since 2011 in its Q4 earnings report, Newmont Mining Corp (NYSE:NEM) is doing wonders for investors thanks to a rebound in the price of gold and copper prices generally.

Furthermore, a shift in investor sentiment towards more “risk off” trades has favored gold miners and bullion prices across the board as alternatives to a choppy stock market.

Looking forward, after NEM beat on its top line forecast in February, it could see continued strong performance if commodity prices remain stabilized.

Best S&P 500 Stocks: No. 1 — Freeport McMoRan Inc (FCX)

  • Market Cap: $13 billion
  • Sector: Metals & Mining
  • 2016 Performance: +53% vs. +1% for the S&P 500

Freeport-McMoRan Inc (NYSE:FCX) had been in near-perpetual free-fall since the Great Recession as commodity prices crashed and big bets on energy soured amid weak oil prices. In fact, there were even fears that debt levels were unsustainable and the company could collapse.

However, FCX stock finally saw some signs of life as it looked to reorganize its debt and actually showed higher-than-expected earnings at the beginning of 2016. A bounce in commodity prices coupled with plans to slash its costs and production have helped Freeport rebound significantly.

Where it goes from here is anyone’s guess, however, since the company could still face cash flow problems if things change for the worse once again.

Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at [email protected] or follow him on Twitter via @JeffReevesIP. As of this writing, he did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2016/03/10-best-sp-stocks-so-far/.

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