STOCKS BACK TOSTART LINE
Stocks that took a beating in ’15 fight for big gains in Q1
It was a painful first quarter for most investors. But at least they have something to show for it.
Investors, who at one point had a nearly $3 trillion loss for 2016, wound up making more than $75 billion during the tumultuous first quarter, according to data from Wilshire Associates based on the Wilshire 5000 Total Market Index. The fact investors have any profits at all is impressive given the fact major market indexes had losses of 10% to 15% as of the middle of February.
Many of the biggest gains, at least on a percentage basis, came from the stocks that had been beaten up
the worst last year. Consider the 10 stocks in the Standard & Poor’s 500 that posted the biggest gains during the first quarter, including materials companies Freeport-McMoRan and Newmont Mining and retailer Urban Outfitters. All 10 were down last year on average by 40%, according to a USA TODAY analysis of data from S&P Global Market Intelligence.
“I’d call it a whiplash rebound,” says Jack Ablin, chief investment officer at BMO Private Bank, referring to the fact that most of the big first-quarter winners had been big losers coming into the year. The broad data certainly bear that out. More than three-quarters of the 127 S&P 500 stocks that jumped 10% or more this year were down in 2015.
Freeport-McMoRan, a company that explores for minerals, oil and natural gas, was the best stock in the S&P 500 during the first quarter on a percentage basis, jumping 53%. That gain is a powerful recovery from last year, when the stock dropped a staggering 71%. “It’s like gravity: The farther the stocks fall, the more they bounce,” says Garrett Nelson, stock analyst at BB&T Capital Markets. The weak dollar this year has also lifted materials stocks such as Freeport and also Newmont since it has elevated the prices of commodities, Nelson says.
Apparel seller Urban Outfitters is another big winner. The stock is the thirdbest performer in the first quarter, rising 46%. Again, it was a story of a stock that was down big in 2015, when Urban Outfitters dropped 35%.