It’s been a long 12 months with lots of noise but no gain for most investors. But some stocks are rocking out anyway.
There are 10 stocks in the Standard & Poor’s 500, including computer chipmaker Nvidia (NVDA), online retailer Amazon.com (AMZN) and healthcare company Edwards Lifesciences (EW) that are up 40% or more since the market itself stalled out on May 21, 2015, according to a USA TODAY analysis of data from S&P Global Market Intelligence. These are the definitive standouts in a market that has frustrated investors with the lack of momentum and gains.
Since hitting its peak a year ago, the S&P 500 is down almost 4% — a loss that’s more than enough to wipe out the roughly 2% dividend yield investors got for being patient and staying invested. The disappointment is widespread, with six of the S&P’s 10 sectors in the red during that time and 116 members of the S&P 500 in a bear market with a loss of at least 20%, according to Howard Silverblatt of S&P Dow Jones Indices. Investors are fretting about everything ranging from what the presidential race will mean for stocks, growing threats the Federal Reserve may hike short-term interest rates in the summer and slowing earnings growth.
But none of that seems to be affecting this select group of stocks that keeps rocking higher even as the rest of the market is covering its ears and bracing for the worst.
Nvidia, which makes a variety of computer chips for smartphones and high-end graphics applications, has soared 113% the past 12 months. The company, which has been a traditional maker of chips used in computer graphics, is tapping into soaring demand for high-performance computer chips used in “deep learning projects” and other advanced applications, according to a report from analyst Michael McConnell, analyst at Pacific Crest. While earnings are contracting for the S&P 500 at large, Nvidia posted 40% higher adjusted profit in the April quarter of 46 cents a share, beating expectations by 12%, says S&P Global. Analysts expect the company’s adjusted profit per share to soar 22% this fiscal year.
Pity the poor retailer taking on Amazon. Amazon.com has been ripping higher with profits that are on fire. Explosive profit and revenue growth has caused the company’s stock to soar 62% since the market peaked a year ago. The massive stock-price gains mean Amazon is now worth $332 billion, valuing it 52% more than its chief rival, Walmart (WMT). After Amazon’s huge profit gain in the first quarter, where it posted a profit of $513 million vs. a year-ago loss, investors’ biggest worry seems to be not owning the stock – despite its trailing price-to-earnings ratio of 290.
Technology is the sector with most of the big winners, accounting four of the top 10. But Edwards Lifesciences, a company developing treatments for heart disease, hasn’t been a slouch either. Shares are up 52% from a year ago and its adjusted profit soared 27% in the first quarter. Meat producer Tyson Foods (TSN), which processes red meat, is up almost as much at 49%. That’s even after the World Health Organization cautioned less than a year ago that processed meat rank up there with smoking as a cancer causing agent.
That’s not to say these stocks will keep cooking. Analysts have a $39.95 a share price target on Nvidia, which would be 10% lower than the stock’s closing price on Monday at $44.47. But analysts see big upside in eight of the 10 winners of the past 12 months, with the highest hopes pinned on social media giant Facebook (FB). Analysts think Facebook – which is already up 44% the past 12 months to $116.07 – could be worth 22% more in 18 months.
For the rest of investors, it’s been a period of waiting and watching with nothing to show for it. But if there’s any consolation, it’s that at least stocks haven’t fallen much, either. “It has been awhile, but flat is better than the bear,” Silverblatt says.