As the year winds down, we look at the best and worst performing S&P500 stocks from 2022 through the market close on December 22, 2022.
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Top 5 S&P500 stocks
In the top list, as expected, many of the top performers are in energy due to high oil prices, so we look at the top 5 but with only 1 energy stock and the next top 4.
|S&P500 Rating||company name||Heart||Sector||performance so far|
|1||western oil||New York Stock Exchange: OXY||Energy||113,2%|
|2||constellation energy||NASDAQ:CEG||public utility services||108,0%|
|14||cardinal health||New York Stock Exchange: CAH||health care||56,5%|
|21||Arch Capital Group||NASDAQ: AGL||Financially||41,4%|
1) West Oil (NYSE: OXY)+113,2%
What are the odds that the top performer in the S&P500 is an energy company and a Warren Buffett property?
In addition to being one of the largest upstream oil companies in the Permian Basin, Occidental Petroleum also operates midstream and chemical companies.
It is also focused on the environment, and the company's presentations to investors highlight a plan to use its current oil and gas operations as a cash-generating mechanism to incubate its carbon capture and sequestration plans. Occidental is uniquely positioned in this business as it has extensive assets and experience in what is known as Enhanced Oil Recovery (EOR). EOR is a type of oil production that involves injecting CO2 into older oil and gas wells to repressurize the reservoir and produce more oil. This helps improve operational, financial and environmental performance.
It is also worth noting that Berkshire has received regulatory approval to acquire up to 50% of Oxy, while its stake in Oxy is currently 21.4%. The more Berkshire increases its position in oil stocks, the more likely it is to rise.
2) Constellation Energy (NASDAQ:CEG)+108%
Constellation is an electric power generation company and the largest provider of carbon-free energy in the United States. The company was spun off from Exelon, a utility and power generation company, earlier this year. Constellation is a leader in nuclear energy and also operates hydroelectric, solar and wind power plants, with 90% of the company's energy production decarbonised.
The company has also set ambitious targets such as: B. The desire to be 100% carbon free by 2040 in the utility assets it owns.
The company serves approximately 2 million residential, public sector and commercial customers, including three-quarters of the Fortune 100, by helping these customers achieve their own climate goals through innovative clean energy solutions.
With a focus on clean energy solutions, this stock outperformed in a year where ESG and energy-themed stocks are in demand.
3) Emphasis Energy (NASDAQ:ENPH)+63,4%
Although classified as a technology company, Enphase is actually the first solar company to commercialize the solar microinverter, which converts energy generated by a solar panel into grid-compatible energy for use or export. Enphase's system allows people to generate, use, store, sell and own their own electricity.
With solar being a clean energy solution and higher oil prices keeping electricity prices higher, this stock outperformed in a year where ESG and energy-themed stocks were in demand.
4) Cardinal of Health (NYSE:CAH)+56,5%
Cardinal Health is a distributor ofmedicine, a global manufacturer and distributor of medical and laboratory products and a provider of performance and data solutions for healthcare facilities.
The Company operates in two segments, Pharmaceuticals and Medical, which gives it economic diversity. The pharmaceutical industry sells branded and generic drugs and consumer products, while the medical segment includes the company's branded medical, surgical and laboratory products.
As a distributor, Cardinal Health is a "go-between" between drug manufacturers and the patients who need those products in the field. Cardinal Health supplies approximately 90% of US hospitals, 60,000 pharmacies and 10,000 physicians' offices to bring pharmaceuticals to millions of patients.
As a company with strong free cash flow, Cardinal Health is a dividend aristocrat, having increased its payouts annually for 36 straight years, making it a safe haven stock, which is why the stock has outperformed this year.
5) Arch Capital Group (NASDAQ: ACGL)+41,4 %
Arch Capital Group Ltd is a leading global financial services company underwriting insurance, reinsurance and mortgage insurance around the world. Arch Capital is a growth stock and has nearly tripled its annual net premiums, with net premiums in YTD3Q22 topping fiscal 2018 premiums by 119%.
The firm increases shareholder value by selectively targeting a variety of specialty markets, maintaining the flexibility and responsiveness to seize market opportunities as they arise, and maintaining a disciplined underwriting approach to selecting and managing risks at all stages of the cycle. insurance, so that they are priced appropriately. This has allowed the company to increase its NAV at CAGR 13.8% over the last 21 years and CAGR 8.4% over the last 4 years, which is why the stock has outperformed.
The 5 Worst S&P500 Stocks
Now let's take a look at the laggards and why they significantly outperformed the broader market. The sectors where stocks come from are much more diverse, with most sectors and the broader market down this year.
|S&P500 Rating||company name||Heart||Sector||performance so far|
|500||Generac-Holdings||New York Stock Exchange: GNRC||Industry||-74,5 %|
|498||alignment technology||NASDAQ: ALGN||health care||-69%|
|497||SVB Financial Group||NASDAQ:SIVB||Financially||-68,2%|
1) Generac Holdings (NYSE:GNRC)-74,5 %
Generac is a leading energy technology solutions company providing primary and backup power generation systems for residential, commercial and industrial (C&I) applications, solar and battery storage solutions, power management devices and controls, advanced power grid and platforms and software services for motors and batteries. Electrical tools and equipment.
Despite rising revenue as power reliability deteriorates with increased demand, the company has seen its profits decline. Its 2022 revenue growth guidance dropped from a median of 38% to a median of 23% after reporting third-quarter results when a client filed for bankruptcy, impacting the company's results.
The company also has product warranty issues and is facing class action lawsuits over a faulty component at the core of its solar energy products.
2) Match Group (NASDAQ:MTCH)-69,9%
Match Group owns and operates the largest global portfolio of popular online dating services, including Tinder, Match.com, Meetic, OkCupid, Hinge, PlentyOfFish, UPWARD, Ship and OurTime, with a total of over 45 global dating businesses.
Match Group is your typical tech stock that was popular in the early days of the pandemic due to its rapid growth and modest earnings. As tech companies have become unpopular, as revenue growth has slowed and operating profit has fallen, stocks have fallen faster than you can say, "It's a combination!" Tinder, its top-grossing generator, also lost popularity and reported disappointing results, prompting the departure of the chief executive of the Tinder app.
Unlike other consumer apps or tech companies, less than 2% of Match Group's total revenue comes from ad revenue, which should make the stock less volatile. However, users often spend their discretionary income on Match Group, which means that a deterioration in macroeconomic conditions will affect user spending.
Match Group appointed a new CEO in May 2022, formerly from Zynga, EA and Walt Disney with experience in publishing and channel strategy. We can only hope this changes not just Tinder, but Match Group's entire portfolio of online dating apps and services.
3) Alignment Technology (NASDAQ:ALGN)-69%
Align Technology is a global medical orthodontic and restorative treatment company known for its Invisalign system and intraoral scanners. The company sees revenue and profit declines on a quarter-over-quarter and year-over-year basis.
The company derives around 44% of its sales from the US, with Switzerland being the next big contributor at 34%, with the rest coming from China and the rest of the world.
Although Align is a healthcare company, its products can be considered to some extent consumer discretionary and, as such, its performance reflects the current macroeconomic uncertainty and weakening consumer confidence, as well as a significant impact from interest rates. and unfavorable exchange rates between currencies.
4) SVB Financial Group (NASDAQ: SIVB)-68,2%
SVB Financial Group owns Silicon Valley Bank, the largest bank in Silicon Valley, and three other companies, namely SVB Capital, SVB Private and SVB Securities. Together, the SVB Financial Group offers services such as commercial banking, venture investment, wealth planning and investment banking.
SVB serves nearly half of US venture-funded life sciences and technology companies, with total customer funds of $354 billion and loans of $72 billion. Total deposits declined because these businesses tend to be in a cash burn phase and their cash burn did not adjust to the slower funding environment, impacting total customer funds.
SVB expects continued pressure on client cash growth as further declines in private investment, exit activity and market-driven earnings materialize until public markets stabilize.
While Federal Reserve rate hikes are expected to continue, unlike other banks, the SVB expects net interest income and net interest margin to decline as the balance sheet shrinks and the funding mix shifts towards interest-earning deposits and loans short term.
The continued volatility of public markets and growing economic uncertainty also pose challenges for SVB.
5) Tesla (NASDAQ:TSLA)-64,4%
We recently reported on Tesla,6 reasons why Tesla fell so low. Tesla had high valuations and was facing declining consumer demand and stiff competition. Elon sold off a lot of stock and was also distracted by not only SpaceX, but the recent Twitter acquisition as well. That meant Tesla had even more unresolved issues, like crash engineering issues and delays in its new releases.
While Tesla's growth story will likely remain intact due to structural tailwinds in the EV industry, as well as Tesla's growth plans such as robotics, battery storage systems, electric semi-trucks and other new revenue sources and expansion of production capacity, for many reasons. someone would say you probably have to be an Elon fan to buy Tesla.
In short, by looking at a company's stock price performance over the year, it becomes clear why companies underperform or outperform. Whenever there is clear underperformance or underperformance against the broader market, there is always not just a macro reason, but also a company-focused reason. Investors would do well to understand these reasons before deciding whether the trend will continue or a reversal is in the offing.