What a year 2020 has been! It has been full of unprecedented events on Wall Street, including the fastest and steepest bear market ever recorded and the fastest recovery from a bear market to new highs. Talk about a roller coaster ride!
With 2020 coming to a close, now makes for a great time to talk about which sectors (and stocks) have outperformed and which have underperformed so far.
The Worst Sector: Energy
The Energy Select Sector SPDR ETF (XLE) has dropped over 51% this year – making it the worst-performing sector. This is for a couple of reasons, including the Russia-Saudi Arabia oil price war that pushed oil prices negative for the first time ever right before the COVID-19 pandemic. The sector still hasn’t recovered.
With less people out and about at the beginning of this year, and then the big spike back to almost normal levels of mobility, the fluctuating patterns have contributed to the sector’s underperformance. Leading the energy sector’s fall are oil stocks like Chevron Corporation (CVX), Valero Energy Corporation (VLO) and Exxon Mobil Corporation (XOM). They have dropped 40%, 47% and 52%, respectively, so far this year. They also all currently have an F–rating in my Portfolio Grader, making them all Strong Sells.
The Best Sector: Information Technology
The Information Technology sector encompasses a vast amount of technology industries, like hardware and software, semiconductors and communications equipment. The volatility of the overall market hasn’t affected this sector too much during 2020. While the annualized average return for the sector is around 18%, the Technology Select Sector SPDR ETF (XLK) currently has a 32% return so far for 2020.
A few strong tech stocks leading the charge are Microsoft Corporation (MSFT), ServiceNow Inc. (NOW), and Zoom Video Communications (ZM). The truth of the matter is they have played an important role in connecting people during periods of lockdown this year.
Zoom has connected people via video, with the stock soaring over 618% just so far this year. Microsoft also has contributed to the online video workplace, with their workplace video and messaging app Teams.
ServiceNow is a primarily software-based company that manages cloud computing software for information technology (IT) services management and digital workflow products. ServiceNow has applications to manage a variety of internal departments—from IT to Security to Human Resources to Customer Service. These apps can be tailored to each company’s specific needs and organizational structure. They are designed to reduce the amount of time that employees need to hunt around for answers, which also saves them money.
My Portfolio Grader grades both ZM and NOW as an A, while MSFT is a B – making all three Buys. These three stocks all currently sit in my Growth Investor Buy List with strong returns – up 94%, 180% and 37%, respectively.
Why My System Works
The reality is it’s been an exciting year for tech stocks. With new advances in AI, self-driving cars, the Internet of Things (IoT), 5G and many other tech developments this year – I’ve been adding plenty of tech stocks to my Growth Investor Buy List. In fact, I recommended eight new tech stocks to my Growth Investor subscribers this year alone!
With 5G technology and developments constantly making headlines this year, I am especially excited about 5G tech stocks. But there is one 5G tech stock, in particular, that I think will see huge gains in the coming months.
I’m calling it The King of 5G.
It is already one of the biggest semiconductor equipment manufacturers in the world, as it provides products that span the entire spectrum of 5G technology, like self-driving cars, robotics, cloud computing, and the Internet of Things (IoT), and can be used in machine learning, optics, sensors, and analytics.
If you’re looking for a fundamentally superior 5G stock with strong earnings and sales growth, this Growth Investor company fits the bill to a “T.” It crushed its third-quarter earnings and hit a new 52-week high yesterday!
Click here to watch my free briefing at 5G and join us at Growth Investor today. Once you do, you’ll receive my special report The King of 5G “Turbo Button” Technology, which gives you an in-depth look at 5G and why this stock is poised to profit off all of the 5G trends. This report is yours – absolutely free.
Note: The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
Microsoft Corporation (MSFT), ServiceNow Inc. (NOW), Zoom Video Communications (ZM)