Investing
5 Top (and Bottom) Performers in 2019 Among the S&P 500
Published:
Last Updated:
The S&P 500 Index has risen by more than 28% in 2019. Of the 10 most heavily weighted shares in the index, none was among the best or worst performers for the full year. Apple Inc. (NASDAQ: AAPL) is the second-most heavily weighted stock in the index (approximately 4.51%) and was the year’s 11th-best performing stock. The index is a float-adjusted, market-cap weighted index.
The Dow Jones industrial average index is up by about 22% for the year, while the Nasdaq Composite is up by more than 34%. About half the gains went to make up for the major dive the markets suffered in the last half of 2018, a drop that bottomed out in mid-December.
The tech sector was the year’s best performer while energy was the worst. Three tech stocks sit atop the ranking of the S&P 500’s best performers, and one energy stock is among the worst.
These five stocks were the S&P 500’s best performers this year.
Chipotle Mexican Grill
This fast-food store seemed to be on the ropes after a spate of food poisoning incidents at its restaurants in 2017 and into 2018. A new CEO was hired in March of 2018, and Chipotle Mexican Grill Inc. (NYSE: CMG) began to focus on what people wanted: food delivery and more menu options. Chipotle’s operating cash flow is up more than 40% and free cash flow is up nearly that much. Investors like the sound of cash, as shares added nearly 94% in 2019. At Monday’s closing price of $836.07 and with a price target of $852.57, the stock heads into 2020 with an implied upside of about 2%.
Target
Comparable-store sales rose by 4.5% year over year in the big-box retailer’s third quarter, and Target Corp. (NYSE: TGT) guided fourth-quarter comps to rise by 3% to 4%. That was probably conservative given the strength of the holiday shopping season. The firm has spent money on renovating stores and that has helped keep traffic and sales up. Target stock nearly doubled in 2019, rising by 95%. Shares closed Monday at $128.89. With a price target of $136.21, the implied upside going into the new year is about 5.7%.
KLA
KLA Corp. (NASDAQ: KLAC) makes the machines that make semiconductor chips. The expected demand increase for 5G chips, semiconductors to hook into the Internet of Things and demand for sheer processing power to slice and dice all the data companies can now collect has boosted KLA shares by 99.3% in 2019. An analyst downgrade from Buy to Sell in late November cut 10% from the share price, but it has fully recovered to close Monday at $178.37. The price target is $187.13, yielding an implied upside of 4.9% in the shares.
Lam Research
Another maker of chip manufacturing equipment, Lam Research Corp. (NASDAQ: LRCX) gets about two-thirds of its revenue from memory chip makers, primarily non-volatile (NAND) and DRAM memory. The market for both has improved, and that improvement is expected to continue into next year. Did we mention 5G? Smartphones will need more memory too. Shares more than doubled in 2019, up nearly 115%. The stock closed Monday at $292.54 and has a consensus price target of $274.05. Is it overvalued or are analysts just asleep at the switch going into the new year?
AMD
The best performing stock of 2019, Advanced Micro Devices Inc. (NASDAQ: AMD) added 146.6% to its share price this year. In addition to its server and PC chips, the company designs and manufactures a number of graphics chips that are also in high demand. In its third quarter, the company reported its highest revenue total since 2005 and its highest gross margin on sales since 2012. Shares closed at $45.52 on Monday, against a price target of $37.77. Again, is the stock overvalued or what?
The hard-hit retail sector places two companies on the list of worst performers, and the energy sector contributes one. A struggling IT solutions provider and a medical device maker round out the year’s worst S&P 500 stocks.
Gap
Over the past five years, while the Dow has added about 60% and the S&P 500 has added almost 58%, Gap Inc. (NYSE: GPS) has dropped about 58%. The company’s plan to spin off its Old Navy stores may have ended with the November departure of the CEO and sliding sales at what have been the company’s best-performing stores. Shares dropped by almost 31% in 2019, and the stock closed at $17.82 on Monday. At the consensus price target of $16.35, Gap is overvalued and a further correction may be coming.
DXC Technology
The two-year-old company was formed from a combination of HP’s service business and the former Computer Sciences Corp. DXC Technology Co. (NYSE: DXC) shares plummeted in August following a lackluster earnings report and even the appointment of a new CEO a month later didn’t change investors’ outlook much. Shares are down 31.2% in 2019, and the stock closed at $36.58 on Monday. The price target of $38.50 implies an upside of 5.2%.
Occidental Petroleum
Earlier this year, Occidental Petroleum Corp. (NYSE: OXY) spent around $57 billion in cash and stock to acquire Anadarko. The acquisition was widely panned by everyone but Warren Buffet, who kicked in $10 billion in exchange for preferred shares and an option on 80 million common shares at an option price of $62.50. Oxy’s shares have ended the year down about 34% and closed Monday at $40.70, against a price target of $49.55, implying an upside of 21.7%. Could happen if crude oil prices continue to rise.
24/7 Wall St.Macy’s
The saddest story in retail this year may be the continuing collapse of Macy’s Inc. (NYSE: M). The shares are down nearly 44% in 2019 and the company has lost some $19 billion in market cap since 2015. Macy’s has neither been able to differentiate itself from the mall-based crowd nor to figure out a way to draw more traffic to its mall stores. Shares closed Monday at $16.77, above the price target of $15.00. The company’s owned real estate may be worth more than its $5 billion market cap.
Abiomed
Medical device maker Abiomed Inc. (NASDAQ: ABMD) has the distinction of being the worst-performing S&P 500 stock in 2019. Shares are down 48.5% this year as the company’s heart pumps were first questioned then exonerated by the FDA, and then, in November, researchers reported that the chances of death increased when the heart pumps were used. Not only that, the Abiomed heart pump adds $15,000 to the hospital bill the researchers noted. Shares closed at $167.29 on Monday, against a price target of $226.50, implying an upside of more than 35%.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
