Investing
The Best Stocks of 2014 Part 2: Financial, Tech, Transport, Utilities
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Stocks are enjoying another stellar year in 2014. The S&P 500 Index was up 14% year-to-date right before Thanksgiving, and the bull market is now more than five and a half years old. 24/7 Wall St. has reviewed the best-performing sector leaders of the S&P 500.
This report is divided into two parts. The first top-performing stocks of the S&P 500 report covered basic materials, consumer goods, retail, healthcare via biotechs and drugs, healthcare devices, non-defense industrials, and defense & aerospace under industrials. This report covers the top bank, non-bank financial, video game, technology, transportation, and utility shares.
Some of the gains in the leaders may seem extreme, but consider that, even with a 14% index gain for the S&P 500, many laggards are present in each sector, as well. 24/7 Wall St. recently even published a list of ten companies that would not be saved by the bull market alone. Quite simply, those companies have serious work to do, regardless of the stock market direction.
Along with each winner by sector of the S&P 500, basic data has been included to show what got each stock to this list. We screened out the companies that were being acquired so that this list would be relevant for the future. Additional insight and an analyst’s outlook were also provided to help see what to expect in 2015.
Wells Fargo
Financial – Bank
2014 YTD: +25%
Stock Price: $54.00
Market Cap: $280 Billion
Wells Fargo & Co. (NYSE: WFC) is now considered the safest of the money-center banks, edging out J.P. Morgan Chase & Co. (NYSE: JPM) due to its trading debacles and recent high legal settlement costs. This is also Warren Buffett’s absolute favorite bank stock, although we noticed that Buffett has ceased buying it. Wells Fargo currently trades at the highest multiple against book value of the major banks. Its dividend yield is 2.6%, and there is, of course, still that hidden $30 billion gain from its stock buybacks, as we pointed out this summer. Wells Fargo has a 52-week trading range of $43.21 to $54.36 and a consensus analyst price target of $54.65.
ALSO READ: Why Everyone Loves Intel Again, Or Will In 2015
Legg Mason
Financial – Non-Bank
2014 YTD: +29%
Stock Price: $56.59
Market Cap: $6.5 Billion
Legg Mason Inc. (NYSE: LM) was considered down and out not that long ago, but that was then and this is now. The asset management firm has supposedly gained more in assets after Bill Gross left PIMCO — now with over $700 billion in assets under management. Legg Mason has a 52-week trading range of $38.15 to $56.90 and a consensus analyst price target of $52.83. The highest analyst price target is all the way up at $65.
Apartment Investment and Management
Financial – REIT
2014 YTD: +47%
Stock Price: $36.95
Market Cap: $5 Billion
Apartment Investment and Management Company (NYSE: AIV) is a real estate investment trust that focuses solely on owning and managing apartment complexes. The economy has gotten better, but many Americans simply are no longer able to qualify for a home mortgage after the recession — and apartments fill that gap handily. The price of the stock is now high enough that the yield is only 2.8%. Apartment Investment and Management has a 52-week trading range of $24.78 to $37.42 and a consensus analyst price target of $36.78. The highest analyst price target is up at $39.50.
Electronic Arts
Technology – Consumer, Video Games
2014 YTD: +89%
Stock Price: $43.60
Market Cap: $13 Billion
Electronic Arts Inc. (NASDAQ: EA) is no longer the largest video game maker by market cap, but it is narrowing the gap with Activision Blizzard, Inc. (NASDAQ: ATVI). EA has the major sports franchises and the recent Titanfall propping it up, as well as many other game franchises. Electronic Arts has a 52-week trading range of $20.47 to $44.06 and a consensus analyst price target of $44.04. One analyst is very ambitious, with a street-high price target of $55 for EA. That might make EA the largest video game stock again.
Avago Technologies
Technology
2014 YTD: +72%
Stock Price: $91.14
Market Cap: $23 Billion
Avago Technologies Limited (NASDAQ: AVGO) makes analog semiconductors, custom chips, radio frequency and microwave components that serve four primary target markets: wireless communications, wired infrastructure, enterprise storage, and industrial. Unlike other top performers, it joined the S&P 500 just this May, taking the place of LSI Corp. after acquiring it. Avago has a 52-week trading range of $43.40 to $92 and a consensus analyst price target of $94. Avago’s highest analyst call is up at $105.
ALSO READ: Top 5 Analyst Bank Stock Picks for 2015
Frontier Communications
Tech – Telecom, Media, Communications
2014 YTD: +61%
Stock Price: $6.97
Market Cap: $7 Billion
Frontier Communications Corporation (NYSE: FTR) is one of the top-yielding dividend telecom and communications companies, and its $7 billion size is far from giant. Formerly called Citizens Communications, it was founded in 1927. Investors should keep in mind that the most recent short interest was over 152 million shares — a whopping 22.7 days to cover. Another issue is that above $7.10 or so, almost all investors who bought from 2008 to 2010 will now be back to even. Frontier has a 52-week trading range of $4.39 to $7.24 and a consensus analyst price target of $6.22. The highest analyst price target is up at $7.50, but one analyst also has a $4.50 price target.
Southwest Airlines
Transportation
2014 YTD: +103%
Stock Price: $38.51
Market Cap: $26 Billion
Southwest Airlines Co. (NYSE: LUV) remains the one airline that has held out on nickel and diming its customers. In fact, customers are still customers on Southwest, rather than mere passengers, as they have become on other airlines. Maybe this makes the argument that customer loyalty drives demand for shares, too? Southwest is still integrating its AirTran buyout, and it is known for generally being the best at using fuel hedging. Southwest has a 52-week trading range of $17.73 to $40.06 and a consensus analyst price target of $44.22. The highest analyst price target on Southwest is all the way up at $55.
Edison International
Utilities
2014 YTD: +36%
Stock Price: $61.70
Market Cap: $20 Billion
Edison International (NYSE: EIX) is the old SoCal Edison and is in the deregulated California market. It was not listed as one of our own 10 safest high-yield dividends for investors because its dividend yield is not as high at 2.3%. Edison International has a 52-week trading range of $44.74 to $63.51 and a consensus analyst price target of $63.56. The highest analyst price target is up at $70 for this stock.
ALSO READ: The Best Performing S&P 500 Stocks of 2014 (PART I)
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