Despite the sell off and big volatility we saw in August, there are some big-name liquid stocks that are making gains. These names largely fall into the "safety zone" in terms of being relatively resistant to economic slowdowns.
We ran a screen for stocks making new 52-week highs and with average volume over 1 million and optionable, and 20 names came up. The results are interesting, see the table below:
20 New 52-Week High Stocks
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What we can note here is that every single one of these names is up for the year, last six months, month and week - impressive. Also many of them pay healthy dividends over 2.5%.
Utilities (both diversified and electric) - AEE, PEG, AEP, PPL, SO, NI, PGN - are the most common sector seen among the "hot 20" new highs, but non-cyclical type groups such as consumer products are also very well represented (ABV), KMB, CL, KO). Those two market areas comprise over 50% of the list.
As always, there is an individual story to each of these stocks, so do your due diligence. And while there are easy ways to trade/invest in these groups in a basket, through the use of an ETF or mutual fund - in some cases they may not perform the same. It depends on the holdings of the basket and, in the case of ETFs, supply/demand factors in.
The most popular utilities ETF is likely the SPDR Select Sector Utilities (XLU) and among the most popular consumer products ETFs is SPDR Select Sector Consumer Staples (XLP). Below you can see their performance information for the same times frames.
XLU & XLP Performance Table
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While XLU has had a nice month and year, it is basically mildly lagging many of the individual utility stocks listed above. XLP similarly holds some of the names listed above in its top holdings, but it has underperformed the specific consumer stocks above by even more.
Could these sectors and stocks underperform if, for example, the market's perception of economic growth shifts quickly? Yes, of course. And could the U.S. dollar's performance impact some of these stocks greatly? Again, yes (likely the consumer goods names).
But seeing what stock names are making new 52-week highs amidst the recent turmoil is a useful tool in my view to find the relative outperformers. And a table full of "green" performance numbers with healthy dividends can be a sight for sore eyes for many investors. Pullbacks in these relative strength winners could be a good lower-risk entry point for long positions.
Disclosure: I currently hold no position in any of these stocks or ETFs and do not have any open trade recommendation on them. It is possible due to systemized trading that a short-term trade in either direction on any of these securities could be made in any of the BigTrends newsletter programs any time in the future.