Four Stocks That Refuse to Sell Off With the Stock Market
If the January Barometer is any guide, stocks could be in for a rough 2014. The 2013 gain of over 29% in the S&P 500 and the gain of over 26% in the Dow Jones Industrial Average may have simply pulled forward most of the expected gains that could be had in 2014. The Dow is now close to being 1,000 points off its high and the S&P 500 lost 3.5% in January.
If the market is now looking bearish again, then shouldn’t most stocks head south with it? The obvious answer is yes. Still, some stocks just refuse to go down with the market.
24/7 Wall St. wanted to identify four very well-known companies which are refusing to participate in the stock market carnage. Two are high-beta stocks and two are companies which would seemingly follow the market trends.
We avoided companies which were booming on volatile drug data, and we also avoided the companies which were running up only because of end-of-week earnings reactions. This end of week earnings criteria kept Chipotle, Facebook, Google and other companies from being included in this screen as well. We will have to see in a couple of weeks if they are able to hold their gains.
Netflix Inc. (NASDAQ: NFLX) is still feeling investor support more than a week after earnings. Netflix is a high beta stock that should at least theoretically be at risk in a market correction over it valuations. After all, isn’t 221-times trailing earnings and 100-times expected 2014 earnings a bit steep if the market is dropping? Netflix also discounted the concerns of net neutrality, but not everyone is convinced. There is love in the air seemingly because the 44 million members will likely be 50 million soon, and then maybe 60 million in the not too distant future. Netflix rose 1.1% to $409.33 on Friday and hit a new high of $412.40 on the day; and shares are up 11% so far in 2014, and they are up well over 300% from the end of 2012.
LifeLock Inc. (NYSE: LOCK) has only been public for about 15 months. It is a high beta stock, trading at 55-times expected trailing earnings and almost 48-times expected 2014 earnings. The driving force here is that identity theft and organized global fraud against consumers is forcing everyone to buy identity protection services. Target was the worst recent news on this front, but there are literally dozens of other companies who have had data breaches on their millions of customers. LifeLock shares hit a new high of $20.83 on Friday and closed up 1.6% at $20.41 on the day. This one is up about 150% from its IPO in late 2012.
Burger King Worldwide Inc. (NYSE: BKW) is in the boring fast food business. With all the targeted wage pressures around fast food workers, with all the health pushback, and with fierce competition, you might just assume that Burger King would be selling off with the broad market. Still, shares hit a new all-time post-IPO high of $24.57 and closed up 1.5% at $24.34 on Friday. The stock price is even more than $1 over the consensus analyst price target. Burger King shares are up 6.5% so far in 2014, and the stock is up 50% from the end of 2012. And the stock keeps rising.
Comcast Corp. (NASDAQ: CMCSA) did report its earnings last Tuesday. Despite the gains, you would think that maybe market pressure would act as a drag on its stock. The addition of 43,000 video subscribers in the last quarter is very small, but still bucked declining trends elsewhere. With telecom providers, satellite TV, cord-cutters and general internet TV options all around, Comcast should theoretically be under subscriber pressure. And another big cable merger is just that much more competition. Still, Comcast is adding bundles to its customers and the revenue per customer is rising and is now approaching $160 per month. Comcast hit a new high of $54.70 on Friday and closed up 0.4% at $54.45 on the day. Shares are up almost 5% so far in 2014, and the stock is up 48% since the end of 2012.