This week's list of top performers is dominated by the previously unloved stocks of the year. I've added a new column which is Year to Date Return (far left column) - this will demonstrate how far many of these have fallen this year (keep in mind this number INCLUDES this past week which was obviously a good week for these names or else they would not be on the list). So for now the market has turned from a "trend follower" market to a "buy the broken stock" market. Only 15 of the 69 are positive on the year, a few of which I'd consider "barely" positive (just over 0% YTD)
Criteria
- Market capitalization $1.75B+
- Average trading volume 100K+
- Stock price $10+
- Return this week 12%+
Green names we own, blue names we have owned in the past or discussed in the blog. 3 Airlines made the top 10. For an example of the current wackiness of the market, Brookdale Senior Living posted a loss and an occupancy decline but since the news was "better than expected" there is a huge move up. We just don't want to buy a ton of businesses whose metrics are declining but this is the type of merchandise the market wants right now. Mechel (MTL) rebounded this week although it is still far far below where we sold out - also the 2 Indian banks we held rebounded. One could theorize if the commodity boom is "over" (as deemed by quant hedge funds) it should be a net positive for China and India since they have to import commodities whereas it would be a net negative for Brazil and Russia who exports said commodities. This would be ironic since "smart money" was piling into Brazil/Russia while pulling away from India/China of late [Jun 21: Money Managers Pulling Away from China/India - Sticking with Brazil/Russia] Retailers made a pronounced move this week as well. Ironically I was eyeing a stock I've owned many times over the year in the tech space - F5 Networks (FFIV) but I reviewed their last earnings report which was not very good before doing so. And that dissuaded me. Again another error - using fundamentals ;)
Again I am just trying to understand the "logic" of some of the moves - so Fedex (FDX) runs up because oil prices are dropping (I get that) but the global economy is supposedly heading to recession (hence the drastic drop in commodities) and yet that is still good enough for Fedex? Hmm... this is just a market that wants to apply logic how it sees fit - so the global economy will drop badly enough that it hurts commodities, and the rest of the world will fall enough so it makes the dollar strong versus the rest of the world (whose economies are sinking) BUT the global economy won't fall enough that it will hurt Fedex. I got it. :) That's the sort of "goldilocks" scenario you have to build to pick the right stocks (on fundamentals) right now. Same goes for a gambling stock like Wynn Resorts (WYNN) - the dropping oil price will bring in hordes of customers that were staying away at $4.10 gas but will flood in at $3.25. Because the rest of the economy (housing, jobs, lack of credit) does not matter - it's all just an "oil trade".
We did own the #1 performing stock of the week, of market capitalization > $500M with Fuel Systems Solutions (FSYS) up 47%. I don't show stocks smaller than $1.75 B in this list.
%YTD Symbol Company Name % Price Week -28.9 BKD Brookdale Senior Living Inc 28.2 -19.7 AMR AMR Corp 26.5 -25.9 CAL Continental Airlines Inc 26.4 -31.8 NDAQ NASDAQ OMX Group Inc 24.0 48.3 PRXL Parexel International Corporation 22.2 0.2 FIS Fidelity National Information Services 21.3 46.0 WRC Warnaco Group Inc 20.7 15.3 RL Polo Ralph Lauren Corp 20.7 -22.7 NWA Northwest Airlines Corp 20.3 -2.3 COH Coach Inc 20.3 -25.8 CBG CB Richard Ellis Group Inc 19.0 -15.6 RMD Resmed Ord Shs 18.8 -12.6 SFD Smithfield Foods Inc 18.7 -21.5 CI CIGNA Corp 18.5 -18.7 JCP JC Penney Co Inc 18.4 -62.4 TSO Tesoro Ord Shs 16.9 2.8 BIO Bio Rad Class A Ord Shs 16.9 -17.2 PDX Pediatrix Medical Group Inc 16.6 31.2 CNQR Concur Technologies Inc 16.2 -49.7 SNDK SanDisk Corp 16.1 -6.1 DF Dean Foods Co 15.9 -22.8 EK Eastman Kodak Co 15.9 -5.3 NUAN Nuance Communications Ord Shs 15.8 -27.6 MTL Mechel ADR Rep 3 Ord Shs 15.8 -29.3 HDB HDFC Bank Ltd 15.8 -42.9 IBN ICICI Bank ADR 15.6 -14.8 AXA Axa ADR 15.6 9.5 HEW Hewitt Associates Inc 15.3 -0.3 G Genpact Ltd 15.0 -2.1 LTD Limited Brands Inc 15.0 13.9 LPNT LifePoint Hospitals Inc 14.9 -31.7 RCL Royal Caribbean Cruises Ltd 14.8 -15.9 NSR NeuStar Inc 14.6 17.0 FFIV F5 Networks Inc 14.4 -24.2 AN Autonation Inc 14.2 -45.8 IGT International Game Tech Ord Shs 14.1 -19.9 M Macy's Inc 14.1 -39.3 FHN First Horizon National Corp 14.0 -11.9 SHLD Sears Holdings Corp 14.0 -1.1 FDX Fedex Corp 14.0 -29.7 RYCEY Rolls-Royce Depository Receipt 13.8 -24.9 WOOF VCA Antech Inc 13.7 -14.2 LRCX Lam Research Corp 13.7 -12.9 AVT Avnet Inc 13.6 17.6 CVC Cablevision Systems Corp 13.6 -14.5 CHH Choice Hotels International Inc 13.5 -19.3 CTXS Citrix Systems Inc 13.5 14.7 CHD Church & Dwight Co Inc 13.3 -2.6 HSIC Henry Schein Inc 13.3 -40.1 CBI Chicago Bridge & Iron Co NV 13.1 -28.4 CREE Cree Inc 13.0 -7.4 TRI Thomson Reuters Corp Ord Shs 12.9 34.2 PWR Quanta Services Inc 12.7 -4.0 WYNN Wynn Resorts Ltd 12.6 -11.2 AGN Allergan Inc 12.6 2.8 EAT Brinker International Inc 12.5 -10.6 MHK Mohawk Industries Inc 12.5 2.3 WCG WellCare Health Plans Inc 12.3 -8.3 TDC Teradata Corp 12.3 -60.2 MGM MGM Mirage 12.3 -50.6 LVS Las Vegas Sands Corp 12.3 -29.1 NWL Newell Rubbermaid Inc 12.2 0.7 LOW Lowe's Companies Inc 12.2 7.6 PVH Phillips-Van Heusen Corp 12.1 -10.4 VSEA Varian Semiconductor Equipment 12.1 -37.4 SUN Sunoco Inc 12.1 -37.6 FITB Fifth Third Banc Ord Shs 12.1 -5.4 GES Guess? Inc 12.0 -33.7 DAI Daimler AG 12.0
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