Don’t let the shaky end in February for stocks distract you. There’s plenty of money being made with S&P 500 stocks this year so far.
Four S&P 500 stocks, including energy play like Marathon Oil (MRO), communications services firm Twitter (TWTR) and consumer discretionary Royal Caribbean (RCL), jumped 40% or more just in February, says an Investor’s Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. If you hit top stocks in January, too, you’re making some real money already
All told, had you invested $10,000 in January and reinvested your money into the top stocks currently in the S&P 500 each month this year, including in February, you’d have $21,109. That’s a solid two-month gain of 111%. That sure beats the 1.5% rise in the S&P 500 this year so far, which only turned a $10,000 investment into $10,147.
Hindsight is 20/20. And clearly, few if any investors could have pulled this off as it’s not a repeatable strategy. But the staggering numbers are a reminder to investors that big gains are possible even in volatile years if you focus on leaders.
Explosive Gains In S&P 500 Energy Stocks
If there was a story in the S&P 500 in February, it was the massive jump in energy stocks. The long languishing sector sprang to life in big way in the second month of the year.
Just look at the top S&P 500 stocks in February.
Two of the top five S&P 500 stocks in February were both in the energy sector. Marathon Oil holds pole position, jumping 53.3% in February alone, as the S&P 500 added just 2.6%. Keep in mind, too, that Marathon already rose 8.5% in January in the same month the S&P 500 sank 1.1%. Marathon is a Houston-based oil and natural gas exploration company.
Soaring energy prices are serving as rocket fuel for energy stocks. The price of light crude oil on the Nymex is up 30% in 2021 so far — up more than 18% in just February. Analysts think Marathon will earn an adjusted two cents a share in 2021. That might not sound like much, and it’s not (translates into $8 million in net adjusted profit), but it sure beats losing $1.16 a share, or $919 million, in 2020.
Another energy exploration company also pulled in a big gain in February. Apache jumped nearly 40% in February, adding to its 0.6% rise in January. These aren’t wild exceptions, either. The Energy Select Sector SPDR ETF (XLE) gained 22.4% in February, too. That’s the top showing of any of the 11 S&P 500 sectors — by far. It’s nearly double the 11.6% gain of February’s runner-up sector: Financials.
Top S&P 500 Stocks In February
|Company||Symbol||Feb. Stock % Gain||Sector||Composite Rating|
|Royal Caribbean||(RCL)||43.5%||Consumer Discretionary||33|
Sources: IBD, S&P Global Market Intelligence
Twitter: The Tech-Related S&P 500 Standout
February was a subpar month for S&P 500 technology stocks. The Technology Select Sector SPDR ETF (XLK) rose just 1.3%, well behind the S&P 500. Even tech darling Apple (AAPL) couldn’t escape the selling and dropped 8% in February.
Tech-related communication services stocks fared better. The Communication Services Select Sector SPDR (XLC) rose 7% in February. That’s not bad, given that sectors closely tied to the economy like energy and financials were the top two for the month.
And Twitter was the S&P 500 communications superstar. Shares of the short-messaging online service jumped 52.5% in the month, making it the No. 2 stock in the S&P 500. The company completely blew away analysts expectations when it reported its quarterly profit on Feb. 9. Twitter made 38 cents a share, topping views by 22.6%.
Sizing Up In The S&P 500 In 2021 So Far
February continues the shift to more economically sensitive sectors that’s been going on all year.
Energy stocks are the top performers in all of 2021. The Energy Select Sector SPDR is up 27% in 2021, followed by an 9.6% rise in the financial sector.
Communication Services, too, keep delivering. In January, you could have almost picked any major network’s shares and scored. That’s continuing. Discovery (DISCA), operator of Discovery Channel, jumped 28% in February, after putting up a 37.7% gain in January, the best showing of any S&P 500 stock in the month.
But the S&P 500 is churning. The S&P 500 dropped 2.5% on Thursday. Soon, all eyes will be on March.
Top Current S&P 500 Stocks Each Month In 2021
Being in the right stock each month turned $10,000 into $21,495
|Month||Top S&P 500 Stock||Symbol||Stock Monthly % Gain||Sector||S&P 500 % Monthly Ch.||Beg. Bal.||Cumulative Value Of $10,000 Investment In January Reinvested In Top Stock Each Month||Composite Rating|
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz