If you're searching for a reason to stick with the markets -- instead of putting what's left of your portfolio under the mattress -- these S&P 500 companies have bucked the market trend so far in 2016.
U.S stocks shuddered on Wednesday, moving the markets further into correction territory, with the S&P 500 closing at its lowest level in three months. The S&P 500 Index was down 7.5% year-to-date as of Wednesday's close. The Dow Jones Industrial Average was also down more than 7% since Dec. 31. (Stocks were wavering in early Thursday trading.)
Investors have put on the breaks as oil prices have been in a free fall, hovering at $30 a barrel. Commodities in general have been testing 12-year lows. On Thursday, a Federal Reserve official suggested that oil's plunge could hinder the central bank from hiking rates further.
"The market is extremely bearish right now," Craig Erlam, senior market analyst at Oanda, told TheStreet on Wednesday. "U.S. stocks are going to have a rough ride in the first quarter and oil is, of course, in for more shocks ... Risk appetite is going to be fairly low for the first few months of the year."
Not surprisingly, energy and commodities stocks make up the bulk of the worst-performing stocks. However the list of the best stocks to date is more diversified. Several retailers, utilities companies and other consumer-related stocks comprise the list. Yet the top-performing stock this year is a less recognized tech stock.
Here are the 10 best-performing stocks for the first two weeks of the year. We've paired the list with ratings from TheStreet Ratings, TheStreet's proprietary ratings tool, for another perspective.
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.
Note: Year-to-date returns based on Jan. 13 closing prices.
10. Constellation Brands
Consumer Non-Discretionary/Distillers & Vintners
Market Cap: $28.7 billion
2016 Return: 1.2%
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 CONSTELLATION BRANDS as a Buy with a ratings score of A+. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, compelling growth in net income and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 11.1%. Since the same quarter one year prior, revenues slightly increased by 6.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Beverages industry. The net income increased by 21.7% when compared to the same quarter one year prior, going from $222.20 million to $270.50 million.
- 48.36% is the gross profit margin for CONSTELLATION BRANDS which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.48% is above that of the industry average.
- Net operating cash flow has significantly increased by 251.82% to $288.50 million when compared to the same quarter last year. In addition, CONSTELLATION BRANDS has also vastly surpassed the industry average cash flow growth rate of -5.14%.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Beverages industry and the overall market on the basis of return on equity, CONSTELLATION BRANDS has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: STZ