The S&P 500 Index ended 2015 down 0.7% for the year, better than the 7% decline the benchmark index hovered at in September as a result of the summer's market volatility, but far short of the 11% gain for 2014.
The markets were roiled in 2015 due to slowing growth in China and other global markets, slumping commodity prices and oil's continuous plunge, as well as geopolitical concerns in the Middle East. U.S. markets had the added uncertainty this year of whether the Federal Reserve would raise interest rates.
"Volatile and lackluster," was how Jeff Kravetz, investment director of the Private Client Reserve of U.S. Bank, described the markets this year. "It's been overall a disappointing year for investors, and I think a lot of that was due to the high volatility that we experienced over the summer and then more recently with the Fed on and off."
The Fed's decision to raise rates finally came to fruition in December, when the federal funds rate was increased by a quarter of a point. It was the first rate increase in nearly a decade.
Despite the tumultuous year for equities, the stocks listed below had outstanding performances in 2015. The technology sector dominated the list of the 10 best-performing stocks in 2015. The sector itself rose 4.3%, outperforming the S&P 500.
Can you guess which stock had the best performance in 2015? Here's the list of best-performing stocks of the year, paired with ratings from TheStreet Ratings, TheStreet's proprietary ratings tool.
TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equity market returns, future interest rates, implied industry outlook and forecasted company earnings.
Buying an S&P 500 stock that TheStreet Ratings rated a buy yielded a 16.56% return in 2014, beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a buy yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.
When you're done be sure to check out mid-cap and small stocks to buy for 2016.
Industry: Technology/Internet Software & Services
Market Cap: $537 billion
2015 return: 46.6%
TheStreet Said: Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate ALPHABET INC
as a Hold with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Internet Software & Services industry average. The net income increased by 45.3% when compared to the same quarter one year prior, rising from $2,739.00 million to $3,979.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 15.1%. Since the same quarter one year prior, revenues rose by 13.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
- ALPHABET INC has improved earnings per share by 35.2% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ALPHABET INC reported lower earnings of $25.08 versus $39.38 in the prior year. This year, the market expects an improvement in earnings ($58.00 versus $25.08).
- Net operating cash flow has remained constant at $6,007.00 million with no significant change when compared to the same quarter last year. This quarter, ALPHABET INC's cash flow growth rate has remained relatively unchanged and is slightly below the industry average.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, ALPHABET INC's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: GOOG