Skip to main content

These Few Stocks are Outperforming the Market in 2016

Earnings season underway plus a volatile, declining market equals few real opportunities on the long side of the stock market for active investors and position traders. Today we'll look at some of the stocks that are outperforming in this weak market, as an update to our recent defensive stocks post.

2016 began with a global stock market rout, but this weakness in the major US stock indices was preceded by a deteriorating picture for individual stocks in the broader market several months earlier. One key statistic to highlight this trend: back in late 2015, researchers at Strategas Partners found that the 10 largest stocks in the S&P 500 had accounted for more than 100% of the index's gains that year. 

Now, as we look at the market in 2016, we see an environment that is not only punishing for the leading averages, but for the leading big cap stocks as well. While the FANG stocks (Facebook, Amazon, Netflix, and Google) powered the market higher for most of last year, their 2016 start has not been as stellar. Year-to-date SPY is down 7%, while FB is also down 7%, AMZN is down 11%, NFLX is down 15%, and GOOG is down 6%

Meanwhile, the average stock is down in 2016. Stocks that are down year-to-date far outnumber those showing a gain YTD. Set your stock screeners to Finviz and run a quick performance scan. You'll find (today) that, of the stocks and ETFs trading at least 100,000 shares per day, 3,736 are down YTD while only 435 are positive. That's a margin of over 8:1 in favor of declining stocks. Not an easy arena in which to boost your investing returns.

So which stocks are outperforming in this tough environment? Well, the REITs and utilities highlighted in our previous defensive stocks post continue to hold up relatively well vs. the S&P 500. I'm also finding a few bright spots in consumer names like Campbell Soup (CPB) and Reynolds American (RAI), and in gold mining shares such as Barrick Gold (ABX), Harmony Gold (HMY), DRD Gold (DRD) and Richmont Mines (RIC).  

Let's take a quick look at these stocks on their daily charts. You'll see each stock's price and its percentage returns (over the past 6 months) plotted against the performance of the S&P 500 ETF (SPY), shown in yellow. 

Reynolds RAI is up 19% over 6 months vs. SPY down 8%.

Reynolds Tobacco RAI vs. SPY stock chart 2016 performance

Campbell CPB is +14% over 6 months vs. SPY -8%. It is one of the only US stocks currently near its 10-year high.

Campbell CPB vs. SPY stock chart 2016
Connecticut Water CTWS, also at a 10-year high, is +19% over 6 months vs. SPY -8%.

Connecticut Water CTWS vs. SPY stock chart 2016 performance

AT&T T has held up particularly well since the start of the year. It is +3% vs. SPY -8%.

AT&T T vs. SPY stock chart 2016

 Barrick Gold ABX has really taken off since January and is +38% over 6 months vs. SPY -8% 

Barrick Gold ABX vs. SPY stock chart 2016

DRD Gold DRD, another gold mining stock I recently highlighted, is +136% over 6 months vs. SPY -8%   

DRD Gold DRD vs. SPY stock gold chart 2106

Finally, Richmont Mines RIC is a gold name that has shown unusual relative strength for some time. The stock is +43% over 6 months vs. SPY -8%.

Richmont Mines RIC vs. SPY stock chart gold performance

Are there other names showing notable strength vs. the Dow and the S&P? Of course, but these are prime examples of some of the larger, more liquid stocks you may find in your research as you run your own stock scans.  

Remember, if this type of market is not conducive to your trading or investing style, you don't have to do anything! There is absolutely nothing wrong with sitting on your hands until a prime opportunity comes along. In fact, it is that very skill (patience) that keeps veteran speculators in the game when others are losing big money and going broke.  

When you see a real opportunity come along, you will be able to deploy your idle capital and seize it. That is, if you have preserved your capital, along with your sanity! 

Subscribe to our free email newsletter. You can follow our real-time updates on Twitter.

Popular posts from this blog

Seth Klarman: Margin of Safety (pdf)

Welcome, readers! Signup for free email updates at the Finance Trends Newsletter . Update: PDF links removed due to DMCA notice. Please see our extensive Klarman book notes below. New visitors, please check the Finance Trends home page for all new posts. Here's something for anyone who has been trying to get a look at Seth Klarman's now famous, and out of print, 1991 investment book, Margin of Safety .  My knowledge of value investing is pretty much limited to what I've read in Ben Graham's The Intelligent Investor (the book which originally popularized the investment concept of a "Margin of Safety"), so check out the wisdom from Seth Klarman and other investing greats in our related posts below. You can also go straight to Ronald Redfield's Margin of Safety book notes .    Related posts: 1. Seth Klarman interviews and Margin of Safety notes     2. Seth Klarman: Lessons from 2008 3. Investing Lessons from Sir John Templeton 4.

Slate profiles Victor Niederhoffer

Slate's recent profile of writer/speculator, Vic Niederhoffer has been getting some attention from traders and finance types in recent days. I thought we'd take a look at it here too, to offer up some possible educational value from Vic's experiences with trading and loss. Here's an excerpt from Slate's profile of Victor Niederhoffer : " I've enjoyed getting your e-mails. It sounds like you've thought a lot about being wrong. Well, the reason you contacted me, to call a spade a spade, is that I'm sort of infamous for having made a big, notorious, terrible error not once but twice in my market career. Let's talk about those errors. The first was your investment in the Thai baht, which pretty much wiped you out when the Thai stock market crashed in 1997. I made so many errors there it's pathetic. I made one of my favorite errors: "The mouse with one hole is quickly cornered." That is key. There are certain decisions you make in li

Clean Money - John Rubino: Book review

Clean Money by John Rubino 274 pages. Hoboken, New Jersey John Wiley & Sons. 2009. 1st Edition. The bouyant stock market environment of the past several years is gone, and the financial wreckage of 2008 is still sharp in our minds as a new year starts to unfold. Given the recent across-the-board-declines in global stock markets (and most asset classes) that have left many investors shell-shocked, you might wonder if there is any good reason to consider the merits of a hot new investment theme, such as clean energy. However, we shouldn't be too hasty to write off all future stock investments. After all, the market declines of 2008 may continue into 2009, but they may also leave interesting investment opportunities in their wake. Which brings us to the subject of this review. John Rubino, author and editor of , recently released a new book on renewable energy and clean-tech investing entitled, Clean Money: Picking Winners in the Green Tech Boom . In Clean