From time to time we like to look at what's been working (or not) in the market over various periods of time. When the market was not moving +20% in 7 weeks, or -20% in 7 weeks on an alternating basis (student body left trading) I used to find a lot of interesting data in these sort of scans in terms of where the relative strength is. Nowadays, I think the overall market is dominant and stock picking is secondary. I've had this thesis since last summer; once the commodities trade blew up there was no place to hide and most asset classes seemed to simply trade in a monolithic nature. To that point Mike Santoli wrote in this week's Barron's a confirmation of my "gut" feel in "Not a Stockpicker's Market"
- Still, even as overall volatility and fear levels have ebbed, the market isn't yet making as many fine discernments among stocks as most would hope. On a three-month basis, the correlation among all stocks has been running above 0.8% (suggesting 80% of a stock's direction is market-determined).
- Robin Carpenter, a quantitative investment consultant at www.CarpenterAnalytix.com, finds evidence of emerging stock-by-stock variance lacking in recent market statistics. He does see some hints that stocks within industries are beginning to go their separate ways, but in general the market's overall direction retains sway.
- This is perhaps not a surprise in the present climate, in which short-term ETF rentals pass for investing in many quarters. But it adds to the list of challenges facing performance-pressed investors -- a list that includes a tendency for large day-to-day direction changes even in a range-trapped tape.
With that said, I wanted to take a look at what's been working the past "month" (which in my world is roughly 4 weeks) - obviously with commodities flying [May 30, 2009: Commodities Set for Best Month Since 1974] I expected this list to look very similar to what was working in latter 2007 or first half 2008. I was not disappointed - this list is chock full of old holdings of ours from that time frame...
Here are the criteria I use to make sure we are looking at more liquid names, and not the single digit midgets which have been the speculators favorite of late. I arbitrarily used $750M as the bottom of my range to exclude a lot of small caps that daytraders have been gravitating to and moving in huge swings.
Criteria
- Market capitalization $750M+
- Average trading volume 200K+
- Stock price $10+
- Return the past 4 weeks 30%+
Some of the sectors captured below
- Russia [May 24, 2009: As Russia's Economy Struggles, Russia's Market Surges]
- Solar (investors run to solar each time oil is bid up)
- Oil related
- Gold / Silver [May 16, 2009: John Paulson Continues to Pile into Gold]
- Insurance firms (Federal Reserve protected "officially" in the past month)
- India (keep in mind 1 day 17% surge post election) [May 18: India - Singh's Scale of Victory Game Changing]
Outside those groups, some interesting one offs include: a few apparel companies (GIL, JCG), a few smallish technology companies (TSRA, DDUP), CME Group (CME) and hog producer SFD which we've talked about quite often.
| Symbol | Company Name | % Price Chg | Mkt Cap |
| TX | Ternium SA | 92.1 | 3,431 |
| MTL | Mechel ADR Rep 3 Ord Shs | 77.3 | 4,583 |
| YGE | Yingli Green Energy Holding | 74.2 | 1,625 |
| STEC | STEC Inc | 67.1 | 794 |
| LNC | Lincoln National Corp | 66.4 | 4,853 |
| CPN | Calpine Corp | 65.2 | 5,810 |
| FCL | Foundation Coal Holdings Inc | 63.3 | 1,312 |
| TSRA | Tessera Technologies Inc | 61.7 | 1,142 |
| PEGA | Pegasystems Inc | 60.7 | 946 |
| SLT | Sterlite Industries (India) Ltd | 54.6 | 9,333 |
| IBN | ICICI Bank ADR | 51.5 | 17,337 |
| GIL | Gildan Activewear Inc | 49.8 | 1,989 |
| PL | Protective Life Corp | 48.9 | 866 |
| DDUP | Data Domain Inc | 47.6 | 1,561 |
| SA | Seabridge Gold Inc | 45.2 | 1,087 |
| CME | CME Group Inc | 44.5 | 21,345 |
| GG | Goldcorp Inc | 44.4 | 29,009 |
| SFD | Smithfield Foods Inc | 44.4 | 1,785 |
| PFG | Principal Financial Group Inc | 43.9 | 5,772 |
| HLF | Herbalife Ltd | 43.8 | 1,798 |
| JCG | J Crew Group Inc | 43.3 | 1,617 |
| IFN | India Fund Inc | 42.6 | 1,135 |
| PLT | Plantronics Inc | 42.6 | 872 |
| PXP | Plains Exploration & Production | 42.5 | 3,396 |
| PRU | Prudential Financial Inc | 41.6 | 16,934 |
| COF | Capital One Financial Corp | 41.0 | 9,675 |
| GOLD | Randgold Resources ADR | 40.9 | 5,352 |
| PAAS | Pan American Silver Corp | 40.7 | 2,043 |
| AEM | Agnico-Eagle Mines Ltd | 39.4 | 9,629 |
| GRA | W.R. Grace & Co | 39.4 | 937 |
| VRX | Valeant Pharmaceuticals Int'l | 39.2 | 1,889 |
| HXM | Desarrolladora Homex DR | 39.1 | 1,509 |
| GGB | Gerdau SA Depository Receipt | 39.0 | 14,772 |
| SSRI | Silver Standard Resources Inc | 39.0 | 1,639 |
| ARA | Aracruz Celulose ADR | 37.1 | 2,745 |
| IGT | International Game Technology | 36.5 | 5,144 |
| TMK | Torchmark Corp | 36.5 | 3,323 |
| AU | AngloGold Ashanti ADR | 36.4 | 15,157 |
| SLW | Silver Wheaton Corp | 36.3 | 3,026 |
| CNW | Con-Way Inc | 36.1 | 1,486 |
| BRS | Bristow Group Inc | 36.1 | 922 |
| BEAV | BE Aerospace Inc | 36.0 | 1,501 |
| AUY | Yamana Gold Inc | 35.9 | 8,626 |
| HIG | Hartford Financial Services | 35.8 | 4,667 |
| WCRX | Warner Chilcott Ltd | 35.7 | 3,307 |
| STT | State Street Corp | 35.3 | 20,195 |
| OIS | Oil States International Inc | 35.2 | 1,295 |
| WLL | Whiting Petroleum Corp | 34.7 | 2,382 |
| TCK | Teck Resources Ltd | 34.6 | 7,648 |
| SFL | Ship Finance International Ltd | 33.6 | 926 |
| MDR | McDermott International Inc | 33.3 | 5,021 |
| VIP | VympelKom OAO | 33.0 | 13,221 |
| HDB | HDFC Bank Ltd | 32.8 | 14,104 |
| CUB | Cubic Corp | 32.7 | 1,020 |
| CTRP | Ctrip.com | 32.4 | 2,741 |
| KWK | Quicksilver Resources Inc | 32.0 | 1,901 |
| PCZ | Petro-Canada | 31.9 | 21,094 |
| FTO | Frontier Oil Corp | 31.4 | 1,830 |
| TNP | Tsakos Energy Navigation Ltd | 31.4 | 832 |
| ABX | Barrick Gold Corp | 31.3 | 33,254 |
| PTR | Petrochina Depository Receipt | 30.7 | 212,840 |
| BVN | Buenaventura ADR | 30.6 | 7,228 |
| ACGY | Acergy ADR | 30.4 | 1,891 |
| KGC | Kinross Gold Corp | 30.3 | 13,938 |
| GFI | Gold Fields ADR | 30.3 | 9,564 |
| SLG | SL Green Rlty REIT | 30.1 | 1,311 |
| WFC | Wells Fargo & Co | 30.0 | 108,728 |
