/Deep Dive: These stocks, including Tesla and Apple, are the real winners for the second quarter of 2020

Deep Dive: These stocks, including Tesla and Apple, are the real winners for the second quarter of 2020


The second quarter was a dramatic one for U.S. stocks — the S&P 500 had its best quarter since 1998.

But many of the best performers were really bounce backs from the doldrums of March, when the market hit bottom during the start of the coronavirus pandemic.

Some stocks are still down for 2020, but there were also some “real” winners — ones that were up significantly in the quarter and the first half of the year.

Below are lists of stocks that rose the most during the second quarter.

• The Dow Jones Industrial Average
US:DJIA
climbed 17.8% in the second quarter, but was down 9.6% for the first half of 2020. (All gains and losses in this article exclude dividends.)

• The S&P 500
US:SPX
added 20% in the second quarter, and ended Tuesday down 4% for 2020.

• The Nasdaq Composite Index
US:COMP
soared 30.6% during the second quarter and is now up 12.1% for 2020.

There are still hundreds of large-cap U.S. stocks with double-digit declines for the year. To lift the sagging economy, the Federal Reserve is supporting the market with extremely low interest rates and a vast increase in the money supply through securities purchases. In addition, the federal government is giving unprecedented aid to people and businesses affected by the coronavirus pandemic.

Rising forward valuations

Here’s chart showing the S&P 500 trading at its highest forward price-to-earnings valuation since February 2001:


FactSet

The S&P 500 traded for 21.6 times weighted consensus forward earnings estimates at the close June 30, up from a forward P/E valuation of 18.3 at the end of 2019.

That forward P/E ratio is up, even thought the S&P 500 is down this year, because analysts have cut their earnings estimates following the economic devastation caused by the Covid-19 outbreak. So there are myriad warnings of an asset bubble.

James Bullard, the president of the Federal Reserve Bank of St. Louis, said last week that he didn’t see evidence of an asset bubble. Charles Evans, the president of the Federal Reserve Bank of Chicago, said the economy might need even further stimulus, and that U.S. interest rates may head into negative territory.

Dow Jones Industrial Average

Here’s how the 30 components of the Dow Jones Industrial Average performed in the second quarter:

Company Ticker Price change – second quarter, 2020 Price change – first half, 2020 Price change – 2019
Apple Inc. US:AAPL 43.5% 24.2% 86.2%
Dow Inc. US:DOW 39.4% -25.5% N/A
Home Depot Inc. US:HD 34.2% 14.7% 27.1%
Microsoft Corp. US:MSFT 29.0% 29.0% 55.3%
Goldman Sachs Group Inc. US:GS 27.8% -14.1% 37.6%
Chevron Corp. US:CVX 23.1% -26.0% 10.8%
Boeing Co. US:BA 22.9% -43.7% 1.0%
Visa Inc. Class A US:V 19.9% 2.8% 42.4%
Cisco Systems Inc. US:CSCO 18.6% -2.8% 10.7%
Nike Inc. Class B US:NKE 18.5% -3.2% 36.6%
UnitedHealth Group Inc. US:UNH 18.3% 0.3% 18.0%
Exxon Mobil Corp. US:XOM 17.7% -36.0% 2.3%
Walt Disney Co. US:DIS 15.4% -22.9% 31.9%
Travelers Companies Inc. US:TRV 14.8% -16.7% 14.4%
3M Co. US:MMM 14.3% -11.6% -7.4%
McDonald’s Corp. US:MCD 11.6% -6.6% 11.3%
American Express Co. US:AXP 11.2% -23.5% 30.6%
Raytheon Technologies Corp. US:RTX 10.8% -30.2% 40.6%
Intel Corp. US:INTC 10.6% 0.0% 27.5%
Caterpillar Inc. US:CAT 9.0% -14.3% 16.2%
International Business Machines Corp. US:IBM 8.9% -9.9% 17.9%
Procter & Gamble Co. US:PG 8.7% -4.3% 35.9%
Johnson & Johnson US:JNJ 7.2% -3.6% 13.0%
Walmart Inc. US:WMT 5.4% 0.8% 27.6%
J.P. Morgan Chase & Co. US:JPM 4.5% -32.5% 42.8%
Verizon Communications Inc. US:VZ 2.6% -10.2% 9.2%
Coca-Cola Co. US:KO 1.0% -19.3% 16.9%
Merck & Co. Inc. US:MRK 0.5% -15.0% 19.0%
Pfizer Inc. US:PFE 0.2% -16.5% -10.2%
Walgreens Boots Alliance Inc. US:WBA -7.3% -28.1% -13.7%
Source: FactSet

Scroll the table to see all the data. Click on the tickers for more about each company.

All Dow components except for Walgreens Boots Alliance
US:WBA
were up during the second quarter, but only six were up for the first half of 2020.

Apple’s
US:AAPL
has been remarkable. The stock was up 43.5% during the second quarter, ending June with a 24.3% gain for the first half of the year.

Other “real” winners among the Dow included Home Depot
US:HD
and Microsoft
US:MSFT.

S&P 500

Here’s how the 11 sectors of the S&P 500 performed during the second quarter:

S&P 500 sector Price change – second quarter, 2020 Price change – first half, 2020 Price change – 2019
Consumer Discretionary 32.6% 6.6% 26.2%
Information Technology 30.1% 14.2% 48.0%
Energy 28.7% -37.0% 7.6%
Materials 25.3% -8.0% 21.9%
Communication Services 19.6% -1.0% 30.9%
Industrials 16.4% -15.5% 26.8%
Health Care 13.1% -1.7% 18.7%
Real Estate 12.3% -10.0% 24.9%
Financials 11.4% -24.6% 29.2%
Consumer Staples 7.3% -7.1% 24.0%
Utilities 1.8% -12.6% 22.2%
Source: FactSet

The consumer discretionary sector was the best performer during the second quarter, but its year-to-date performance shows how dramatically it fell before the big comeback. The information technology sector was second-best during Q2. However it was, by far, the best performer in the first half of 2020.

Among the S&P 500, 451 stocks rose during the second quarter, but only 135 were up for the first half of the year.

Here are the 20 best performers among the S&P 500 during the second quarter of 2020:

Company Ticker Price change – second quarter, 2020 Price change – First half, 2020 Price change – 2019
Apache Corp. US:APA 223.0% -47.2% -2.5%
Halliburton Co. US:HAL 89.5% -47.0% -7.9%
Marathon Oil Corp. US:MRO 86.0% -54.9% -5.3%
PayPal Holdings Inc. US:PYPL 82.0% 61.1% 28.6%
Gap Inc. US:GPS 79.3% -28.6% -31.4%
EBay Inc. US:EBAY 74.5% 45.3% 28.6%
Dish Network Corp. Class A US:DISH 72.6% -2.7% 42.6%
Freeport-McMoRan Inc. US:FCX 71.4% -11.8% 27.3%
ViacomCBS Inc. Class B US:VIAC 66.5% -44.4% -4.0%
Abiomed Inc. US:ABMD 66.4% 41.6% -47.5%
CarMax Inc. US:KMX 66.4% 2.1% 39.8%
Devon Energy Corp. US:DVN 64.1% -56.3% 15.2%
D.R. Horton Inc. US:DHI 63.1% 5.1% 52.2%
Hologic Inc. US:HOLX 62.4% 9.2% 27.0%
Lennar Corp. Class A US:LEN 61.3% 10.4% 42.5%
Chipotle Mexican Grill Inc. US:CMG 60.8% 25.7% 93.9%
Diamondback Energy Inc. US:FANG 59.6% -55.0% 0.2%
Marathon Petroleum Corp. US:MPC 58.3% -38.0% 2.1%
Aptiv PLC US:APTV 58.2% -18.0% 54.2%
Occidental Petroleum Corp. US:OXY 58.0% -55.6% -32.9%
Source: FactSet

“Real” winners on the list, with tremendous gains in the second quarter but also double-digit gains for the first half of the year, included PayPal
US:PYPL,
eBay
US:EBAY,
Abiomed
US:ABMD,
Lennar
US:LEN
and Chipotle Mexican Grill
US:CMG.

Nasdaq-100

Here are the 20 best performers among components of the Nasdaq-100 Index
US:NDX
during the second quarter:

Company Ticker Price change – second quarter, 2020 Price change – first half, 2020 Price change – 2019
Tesla Inc. US:TSLA 106.1% 158.1% 25.7%
MercadoLibre Inc. US:MELI 101.8% 72.4% 95.3%
DocuSign Inc. US:DOCU 86.4% 132.4% 84.9%
PayPal Holdings Inc. US:PYPL 82.0% 61.1% 28.6%
EBay Inc. US:EBAY 74.5% 45.3% 28.6%
Zoom Video Communications Inc. Class A US:ZM 73.5% 272.6% #N/A
Lululemon Athletica Inc. US:LULU 64.6% 34.7% 90.5%
Align Technology Inc. US:ALGN 57.8% -1.6% 33.2%
Splunk Inc. US:SPLK 57.4% 32.7% 42.8%
Microchip Technology Inc. US:MCHP 55.3% 0.6% 45.6%
Cintas Corp. US:CTAS 53.8% -1.0% 60.2%
Autodesk Inc. US:ADSK 53.2% 30.4% 42.6%
Synopsys Inc. US:SNPS 51.4% 40.1% 65.2%
DexCom Inc. US:DXCM 50.6% 85.3% 82.6%
Seattle Genetics Inc. US:SGEN 47.3% 48.7% 101.7%
Expedia Group Inc. US:EXPE 46.1% -24.0% -4.0%
BioMarin Pharmaceutical Inc. US:BMRN 46.0% 45.9% -0.7%
Cadence Design Systems Inc. US:CDNS 45.3% 38.4% 59.5%
Nvidia Corp. US:NVDA 44.1% 61.5% 76.3%
Workday Inc. Class A US:WDAY 43.9% 13.9% 3.0%
Source: FactSet

“Real” winners included Tesla
US:TSLA,
which more than doubled during the second quarter, but also was up an incredible 158% for the first half of 2020.

Others in the “real” category included MercadoLibre
US:MELI,
DocuSign
US:DOCU,
Zoom Video Communications
US:ZM
and several more that showed double-digit (or better) gains for the second quarter and first half of the year.

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