Stocks have enjoyed yet another wonderful year in 2014, and the bull market is now more than five and a half years old. With the S&P 500 index up almost 14% year-to-date ahead of Thanksgiving, 24/7 Wall St. wanted to review the best-performing sector leaders of the S&P 500 Index.
This report has been broken out into two parts. This first part covers basic materials, consumer goods, retail, healthcare via biotechs and drugs, healthcare devices, non-defense industrials, and defense & aerospace under industrials.
With the S&P 500 so strong in 2014, the moves of the leaders may seem extreme. Just keep in mind that many laggards are also present in each sector. 24/7 Wall St. has been quick to point these out, as well. In fact, we recently showed ten companies that would not be saved by the bull market alone — they are going to have to make serious changes, regardless of the stock market direction.
In our review of the major sector winners, we included some basic data about what has made each stock the top performer — but we screened out the companies that are being acquired to keep this relevant for the future. We also provided an analyst’s outlook and added some insight about what to expect ahead of 2015.
2014 YTD: +65%
Stock Price: $17.22
Market Cap: $20 Billion
Alcoa (NYSE: AA) was booted out of the Dow Jones Industrial Average in 2013, almost at the exact wrong time. While it is up 65% or so in 2014, it is up over 90% over the last 12-months. Still, most of the gains were earlier in 2014. Alcoa has migrated away from being so dependent on the aluminum market and has gone after high-performance parts for cars and planes. The company’s turnaround has been monumental, and some analysts think the stock now has a lot more room to go — perhaps into the mid-$20s. Does it matter that this was a $30 and $40 stock before the recession? It will to some if the stock continues its performance into 2015, with a valuation of under 17-times 2015 expected earnings. Alcoa has a 52-week trading range of $9.29 to $17.75 and a consensus analyst price target of $18.45.
Keurig Green Mountain & Monster Beverage
Consumer Goods – Food & Beverage
Keurig Green Mountain, Inc. (NASDAQ: GMCR) and Monster Beverage (NASDAQ: MNST) are dual leaders in the broad consumer goods sector of the S&P 500. These are not technically merger stocks, but the critical ingredient here (besides water in the drinks) is big investments from The Coca-Cola Company (NYSE: KO). Keurig’s performance year to date was +87% and Monster’s performance year to date was +61%.
Keurig closed Monday down 1.4% at $138.39 and has a 52-week trading range of $63.50 to $158.87 and a consensus analyst price target of $143.90. Monster closed down 0.6% at $108.79, and it has a 52-week trading range of $57.07 to $111.51 and a consensus analyst price target of $111.13. Now that the Coca-Cola investment events have taken place, can the performance even come close to a repeat in 2015?
Consumer Goods – Apparel
2014 YTD: +58%
Stock Price: $70.00
Market Cap: $15 Billion
Under Armour, Inc. (NYSE: UA) has been the consumer goods leader in apparel with a 58% gain so far in 2014. More importantly, Under Armour is the new kid on the block that took the athletic apparel market by storm over the last decade. It has said, “Hello, Nike and Adidas!” for longer than either company likely wishes. Under Armour is expensive at over 50-times 2015 earnings estimates, but earnings growth is about 26% for 2014 on about 30% sales growth. With a value of $15 billion, it may now be in the category of too large to acquire. The one that got away… Under Armour has a 52-week trading range of $39.76 to $73.42 and a consensus analyst price target of $71.54.