It’s easy to get caught up in the day to day fluctuations, but I’ve always believed that any sound investing strategy involves keeping an eye on the big picture. Take today, October 3, for example. On this day last year, the major indices plunged over 2% to close out the worst quarter since the 2008 financial crisis. The Dow closed at 10,655 points.
Since then, while we have faced our fair share of ups and downs, the major indices have been slowly but steadily been creeping upward. And those small daily gains, while not enough to attract media attention, do add up: In one year, the Dow has risen 23% and the S&P 500 nearly 20%.
While today may not bring any big market moving headlines, it still represents a milestone for Wall Street—one that I don’t want to go unnoticed. So I want to take a moment to review the past year since the indices hit their multi-year lows and highlight how some of the biggest sector players fared in the past year.
First, as to be expected, not all sectors fared equally well during the past 12 months—in the past year, consumer spending was a primary growth driver while the financial sector and commodities continued to tread water:
|
Sector |
12 Month Performance |
|
Capital Goods |
25% |
|
Consumer Cyclical |
23% |
|
Technology |
22% |
|
Healthcare |
22% |
|
Conglomerates |
22% |
|
Transportation |
19% |
|
Services |
18% |
|
Energy |
11% |
|
Consumer Non-Cyclical |
9% |
|
Financial |
4% |
|
Basic Materials |
-5% |
Within several of these key sectors, we saw varied performance from the top players—here’s a quick breakdown of some of the largest companies on the market and my current recommendation for each stock. As always, if there is a particular company that you want to run through my fundamental and quantitative screens, simply plug it into my portfolio grader tool here.
Capital Goods
|
Ticker |
12 Mo. Performance |
Current Rating |
|
MMM |
30% |
|
|
CAT |
16% |
|
|
BA |
15% |
|
|
DE |
27% |
|
|
LMT |
29% |
Consumer Cyclical
|
Ticker |
12 Mo. Performance |
Current Rating |
|
NKE |
11% |
|
|
F |
1% |
|
|
GM |
17% |
|
|
AZO |
16 |
|
|
SWK |
56% |
Technology
|
Ticker |
12 Mo. Performance |
Current Rating |
|
AAPL |
73% |
|
|
MSFT |
19% |
|
|
GOOG |
47% |
|
|
IBM |
20% |
|
|
INTC |
7% |
Healthcare
|
Ticker |
12 Mo. Performance |
Current Rating |
|
JNJ |
8% |
|
|
PFE |
43% |
|
|
MRK |
39% |
|
|
NVS |
12% |
|
|
GSK |
14% |
Energy
|
Ticker |
12 Mo. Performance |
Current Rating |
|
XOM |
26% |
|
|
CVX |
27% |
|
|
BP |
18% |
|
|
COP |
-9% |
|
|
HAL |
12% |
As I mentioned last week, we’re in the middle of a transition period, so I wouldn’t necessarily say that every stock is going to repeat its performance this year. In the short term we’ve seen some surprising jumps from big companies across the board—even those with questionable fundamentals. But that’s about to change. As we head into earnings season, investors will realize which stocks are truly good bets, and there will be a flight to quality. So now more than ever I urge that you keep an eye on analyst estimates and use my portfolio grader tool to separate the wheat from the chaff. Doing this, and keeping track of the tidbits I post to this daily blog, will help ensure another solid year of profits.
Sincerely,
Louis Navellier