With global stock markets teetering on the brink of a bear market, investors have given up hope of making money this year.
The MSCI All-Country World Index, which measures the performance of emerging and developed equity markets, has fallen 20 per cent from its high this year. G7 countries Italy, Germany and France have seen their stock markets drop more than 25 per cent this year, dragged down by Greece’s virtual bankruptcy. And there’s no hiding as fast-growth countries such as India and Brazil have declined almost as much.
In the U.S., stocks have slumped a less-severe 10 per cent, and there’s hope for investors looking to finish 2011 in the black for a third straight year. In fact, several stocks in the benchmark S&P 500 Index, such as gadget maker Apple and Internet search company Google, tend to outperform between the end of summer and the finish of the year, historical data show.
Nothing is a sure thing, especially with so much uncertainty. Later this month, the Federal Reserve meets to discuss interest-rate policy as the economy has ground to a halt, which could lead to another asset-purchase program. There is mounting concern that a Greek debt default will occur – the Greek stock market has plunged 40 per cent this year while two-year note yields have spiked to 70 per cent.
On the other hand, stock prices typically rise in December heading into the holidays in anticipation that new funds flowing into the market in January will lead to price appreciation (the so-called Santa Claus Rally). The third-quarter earnings reporting season begins in earnest next month, with corporate profits still expected to be strong, even as the unemployment has been stuck at or above 9 per cent for two years.
As the Dow Jones industrial average has suffered triple-digit fluctuations in 21 of the past 28 trading sessions, investors may be happy to hear that 427 constituents of the S&P 500 have historically risen from now until the end of the year, based on data from the past 10 years.
The following 10 stocks are the best performers on the S&P 500 from Sept. 12 until the end of the year over the past decade. As some companies have been publicly traded for less than a decade, such as Google, TheStreet is including those that have information for more than five years. That excludes some big gainers like Carefusion and First Solar , which have fewer than six years of data for the time period.
Company Profile: NetApp is a supplier of enterprise-storage and data-management software, and hardware products and services. The stock is down 35 per cent this year.
Average Return Since 2001: 19.8 per cent
Best Late-Year Performance: +48.1 per cent in 2004
Worst Late-Year Performance: -42.6 per cent in 2008
Analysts Ratings: Twenty-four analysts, or 60 per cent of those following NetApp, rate the stock a “buy,” including those at firms like Merriman Capital and Piper Jaffray. The other 16 saying investors should hold onto shares. The average price target of $49.72, according to data collected by Bloomberg, suggests upside potential of 39 per cent from current levels.
Company Profile: Apple is best known for its Mac line of computers, the iPod, iPhone and iPad devices, and iOS operating system. Shares of Apple are up 17 per cent in 2011.
Average Return Since 2001: 20.3 per cent
Best Late-Year Performance: +79.4 per cent in 2004
Worst Late-Year Performance: -42.7 per cent in 2008
Analysts Ratings: Apple is among the most widely followed companies on Wall Street, garnering 55 total analyst recommendations. Fifty of those firms, including Jefferies and Sanford C. Bernstein, say investors should buy shares of Apple. The only over five researchers following the stock say investors should hold onto shares. The average price target of $499.53 is about 33 per cent above where the stock currently trades.
8. Nasdaq OMX Group
Company Profile: Nasdaq OMX Group is a global exchange group that delivers trading, exchange technology, securities listing, and public company services across six continents. The company owns and operates the Nasdaq stock market. Shares of Nasdaq OMX Group are down 6 per cent this year.
Average Return Since 2002: 20.5 per cent
Best Late-Year Performance: +68 per cent in 2004
Worst Late-Year Performance: -20.9 per cent in 2008
Analysts Ratings: Thirteen research shops, including Deutsche Bank and Sandler O’Neill, have “buy” ratings on Nasdaq OMX Group. The other eight researchers following the company say investors should hold shares. The average price target of $28.37 represents upside potential of 27 per cent.
7. Cliffs Natural Resources
Company Profile: Cliffs Natural Resources is a producer of iron-ore pellets in North America, a major supplier of direct-shipping lump and fines iron ore out of Australia, and a significant producer of metallurgical coal. Shares are down about 2 per cent this year.