Photo: Daniel Goodman / Business Insider
The S&P 500 has had a wild ride so far this year, rising 12 per cent in the first quarter and then losing half of those gains in the second quarter.A few stocks have greatly outperformed the competition.
Most notably, travel stocks and housing related stocks fill this list. The performance of these two sectors could be a solid signal that the economy is improving.
Some of the top performers saw gradual gains while others received big boosts after blockbuster first quarter earnings reports.
It you held a portfolio of the 10 best stocks in the S&P 500 since the start of the year, you could retire to a private island by next week.
At one point, Teradata surged as high as $77.14 per share from the $48.51 mark it started the year at. Even though it has dropped to $68.03 from its high for the year, the stock has still climbed over 40 per cent on the year.
On April 25, EW beat earnings estimates and its stock jumped over 12 per cent. Investors also expect big things for the company's trans catheter aortic valve, now that it is covered by Medicare.
On April 19, SHW reported earnings of 95 cents per share compared to 63 cents the year before. Sales from its paint stores were a huge boost to the company's performance, which is also an indicator of the improving housing market. Sales for the Paint Stores Group rose 21 per cent in the first quarter and five new stores were added.
With the housing market showing signs of life, Lennar has been on a tear all year long. Most recently, LEN announced that gross margins on home sales were up 310 basis points to 22.5 per cent. Overall, revenues rose 22 per cent to $930.2 million.
'Evidence from the field suggests that the 'for sale' housing market has, in fact, bottomed and that we have commenced a slow and steady recovery process. And while the housing downturn was broad-based and national, the recovery process continues to be very localised,' said Stuart Miller, Chief Executive Officer.
Dean Foods saw each of its three segments, the Fresh Dairy Direct, WhiteWave-Alpro, and Morningstar all increase revenue in the year's first quarter, causing the stock to jump 16 per cent when this was announced in mid-February. Along with the solid earnings report, the company's forecast was far above expectations.
As Forbes reported in early June, 'DF has taken initiatives to restructure operations in an effort to reduce costs while expanding its branded product through acquisitions.'
PulteGroup, a homebuilder which is often referred to as an indicator of the housing market, is one of the top performers of the year on revenue that rose 9.4 per cent from the prior year's first quarter.
Along with progress that correlates with the improving economy, Pulte has strengthened margins by reducing overhead. Even as the top line growts, management expect overhead costs in the range of $485-$495 million compared to last year's $520.
After Expedia spun off TripAdvisor, the stock gradually rose up until the end of April, sitting at just over $31 on April 24 after starting the year at just over $29.
Then, on April 27 the company announced an earnings of $0.26 on revenues of $816.5 million while analysts expected $0.16 on $783.96 revenues. Expedia exploded 23.5 per cent that day and has since climbed to $45.44.
TripAdvisor was spun off from Expedia in December, and has seen its stock steadily rise throughout its first six months of existence. By February 8, the company reported a 19 per cent surge in profits on strong advertising revenue.
Sears' stock has seen tremendous volatility in the the last year. 2011 ended with management announcing it would close 120 stores . Days after the announcement, chairman and largest shareholder, Eddie Lampert, reported that he would be buying roughly $130m shares of the stock from his own fund, which restored some confidence.
Investors are banking on key strategies to drive traffic into its stores like its Shop Your Way Rewards program, layaway offering, and increasingly localised merchandise offerings.
While up significantly since the beginning of the year, the stock is still down 18 per cent from a year ago.