November 28, 2019
We still have more than a month of the fourth quarter remaining for 2019 but let’s preemptively review a few of the most recognizable top performing S&P 500 stocks of the year. This time of year is commonly known for a Santa Clause Rally, where positive momentum from the year continues through year end. For reference, the S&P 500 is up roughly 26% YTD.
YTD Return: 100%
Sector Benchmark: 28%
Why: New CEO, John Visentin, has a vision to manage Xerox’s software products in a way that will turn the company back into a tech powerhouse. Because shares tumbled by 32% in 2018, they didn’t have much room to fall further, positioning the company for the 2019 run up the stock has experienced. In lieu of redirecting the company, Xerox has made multiple failed attempts for a takeover of HP (Tii:HPQ) with no sign of backing down until the deal is completed.
YTD Return: 93%
Sector Benchmark: 39%
Why: Target’s outperformance is likely a combination of effective corporate initiatives and capitalizing on the misfortune of other discount retailers in their competitive space. Robust earnings and positive sales trends are proof that the company is in the right space to lure and retain loyal customers. It is estimated by Barron’s that $9 billion of sales are up for grabs due to competitor store closings.
YTD Return: 82%
Sector Benchmark: 21%
Why: With food borne illness and contamination setbacks seemingly behind them, Chipotle’s had a record year among fast food peers. Their expanded menu including carne asada, up-to-date use of technology in mobile ordering & delivery, and strong financials make them an investor favorite for the year.
YTD Return: 71%
Sector Benchmark: 67%
Why: Analysts are expecting considerable growth in Apple’s wearables technology and products, with AirPods and Apple Watch leading the way. The company has seen strong iPhone 11 sales and the stock has hit an all-time high earlier this month. Rumors of a economically priced iPhone release have been circulating and the company has even dipped their toe into the financial services sector with a credit card offering.
YTD Return: 68%
Sector Benchmark: 28%
Why: Although Tyson missed on their most recent earnings announcement, the stock has appeared to be unfazed. Tyson is openly creating a niche in the industry of plant-based protein, but more so with chicken products vs beef. They have been forward thinking by proactively investing in technology and infrastructure to sustain growth and remain competitive going forward.
YTD Return: 55%
Sector Benchmark: 30%
Why: Also under new leadership, GE is now guided by former Danaher (Tii:DHR) CEO, Larry Culp and has just appointed newly hired CFO, Carolina Dybeck Happe. During 2018, shares of GE were off by 57%, again, making conditions perfect for a rebound. Wall Street seems to approve of the leadership appointments and future prospects of the company continue to improve the further the company moves from historical write-downs and failed acquisitions. Still, GE investors are taking note and see a bright, but long road ahead.
Note – All returns are as of November 25, 2019