Stock market investing
The stock market has rebounded sharply since its downturn at the end of 2015. Let’s take a look at the biggest gainers of this summer. Every stock on this list has gained at least 25% over the past quarter and is currently listed on the S&P 500.
Read to the end of the article to see the stock that gained 55%, the stock that gained 72%, and which stocks look primed to continue their hot streak.
Note: Return numbers calculated at close on September 9, 2016
- Best Buy BBY: 25.24%
Best Buy reaches across six different categories for their revenue. Not only are they leaders in consumer electronics, but they have established business in computing and mobile phones, entertainment, appliances and services. Their last segment is named other and includes snacks.
Looking forward, the company aims to expand through multiple channels thus reinforcing their market power. BBY also is planning on reducing costs through fiscal 2017.
The stock has had a particularly strong summer, posting a 25.24% return over the last 3 months. Much of its price appreciation occurred in late August, where strong financial results spurred optimism.
Reports released about both earnings and revenue beats against projections catapulted the stock 11% at one time. The great momentum continued after a strong second half was anticipated.
- Kinder Morgan KMI: 27.11%
Kinder Morgan, with its market capitalization of $48 billion and revenue of $13 billion, is North America’s biggest energy infrastructure company. They have major holdings of pipelines and terminals. They transport multiple energy sources such as natural gas, crude oil, and more.
KMI is split into six revenue segments. The Natural Gas Pipelines segment operates pipelines, facilities, and storage systems. The CO2 segment deals with the entire life cycle of CO2 for oil fields. The Terminals segment has a vast number of facilities throughout the U.S.
Products Pipelines also operates pipelines for various energy sources, and the Kinder Morgan segment operates pipelines through Canada. The Other segment encompasses the rest of the company’s revenue.
Over the past three months, shareholders of KMI have been rewarded with a 27.11% gain. KMI has not had a significantly large up day in the last three months but has instead been consistently and slowly growing since the beginning of the year.
- Nordstrom JWN: 28.74%
Nordstrom is a popular retailer that prides itself as a leader in fashion specialty. Like most retail businesses, the company’s sales are extremely seasonal and much of their profit relies on Q4 holiday shopping.
JWN is comprised of two revenue segments: retail and credit. Their retail segment is diversified into several revenue channels. Their private label inventory is characterized by high quality materials and a focus on a customer’s experience.
Nordstrom also has store branded debit cards and credit cards. Both of these cards come with a loyalty program that is designed to increase repeat business. The credit segment of JWN helps not only increase sales but also collect revenue from credit card fees and interest.
Over the past 3 months, JWN has returned 28.74% to shareholders. A revenue miss in August was overshadowed by better than expected earnings and pushing the stock 11.4% higher. Several days later, UBS assigned Nordstrom a buy rating which continued to help the stock up.
- Nvidia NVDA: 29.07%
Nvidia focuses on visual computing as it relates to Gaming, Professional Visualization, Datacenter and Automotive. The company’s main products each serve those particular markets. GeForce is aimed for gaming, Quadro is used for professional visualization, and GRID for datacenter.
The rising popularity of video game sports, also called eSports, and the increasing hype for the upcoming virtual reality technology as only helped the already widely popular industry of computer gaming. Even without those contributions,computer gaming is already one of the largest entertainment industries.
NVDA has seen shares increase by 29.07% over the previous quarter. It has risen with the semiconductor stocks as technology companies like AMD have grown at a very high clip over the past year.
Gains of 24% in revenue year over year in Q2 led to high praise from analysts and an upgrade from Morgan Stanley and Deutsche Bank. These raised price targets and upgrades pushed the stock 4.4% on August 12th.
- Spectra Energy SE: 29.59%
Spectra Energy is a player in the natural gas space and leader in natural gas infrastructure. They are involved through the whole process, from gathering to distribution. The industry is seperated by name into three distinct parts, including gathering and processing, transmission and storage, and distribution.
SE holds multiple types of assets to support their operations. Massive facilities support high capacities along with extensive pipelines for both natural gas and crude oil. In addition to their over 20,000 miles of pipelines for natural gas transmission, the company has a 50% interest in a major natural gas gatherer and vast partnerships through their MLP.
Spectra Energy has increased by 29.59% the past three months. The major event that affected this company the most over the summer was an agreement for Enbridge to acquire Spectra. The acquisition will create the biggest energy infrastructure business in North America.
The Enbridge Spectra deal is being praised for its simplicity and natural fit between the two companies. Not many of the affected operations are expected to overlap.
- eBay Inc EBAY: 32.49%
eBay is a popular website that allows buyers and sellers to transact in a safe and reliable way through the internet. They have been one of the leaders in global commerce since their initial public offering in 1998.
EBAY prides itself in its accessibility for customers no matter where they are, 24 hours a day. The company’s vast variety in online inventory is spurned by its many sales outside of the U.S., which surpass the amount of business done domestically.
EBAY has been a great recent choice for shareholders lately, earning them 32.49% over the past quarter. After generally underwhelming stock price performance from October of last year to the end of June this year, the stock took off at the beginning of July.
The company had a great Q2 report. Among its many accolades and improvements, the company was able to increase revenue 5.7% year over year. This led to an 11.7% increase in stock price and really helped drive the rest of its gains.
- Urban Outfitters URBN: 37.08%
Urban Outfitters is a popular retail operation that specializes in brands that appeal to the trendy hipster fashion. The company really emphasize the importance of creating an emotional relationship with the customer.
URBN is trying to broaden its options past the conventional brick and mortar model and into internet sales through its e commerce sites and apps.
Higher priced merchandise has helped the stock’s margins, and the company has been able to grow revenue by an average of 9% for 5 straight years. Urban Outfitters has recently joined the political discussion by selling several “anti Trump” shirts in their stores.
Urban Outfitters has created a favorable relationship with shareholders lately, resulting in a 37.08% gain. Strong sales reports in June from many major retail stores pushed the industry higher after a period of uncertainty.
A great Q2 report beating both EPS and revenue estimates sent the URBN stock price 9% higher on the 16th and 12.36% higher on the 17th.
- Micron Technology MU: 38.47%
Micron is a global leading provider of semiconductor systems. Their impressive product portfolio features advanced technology in memory, storage, computing, mobile, networks, and more. MU’s biggest customers are original equipment manufacturers and retailers.
Micron partners with Intel for various flash and memory products and with Nanya Technology Corporation for DRAMs. The company also has manufacturing facilities worldwide which required significant capital to establish.
The share price of MU has grown by 38.47% over the past three months. This was after the difficult beginning months of the year, where the stock fell from $18 to $10 in the course of months.
MU’s push for shareholders rights brought the stock 5.4% higher at the end of July. Major gains in other semiconductor stocks also raised the tide for MU along the way. An admission of shortages on memory by HP’s CEO lifted the stock by 6%.
- NetApp NTAP: 40.98%
NetApp is an IT company that uses its products and services to help its clients manage data and create an IT environment. Some of their established clients include government organizations, service providers, enterprises and partners.
The company has a strategy to incorporate all of the data from the various cloud providers into a digestible solution for IT systems called the Data Fabric strategy. NetApp puts a primary focus on addressing customer needs by increasing their efficiency and ability to grow.
The past three months have been great for NTAP shareholders, as they’ve seen the value of their shares increase by 40.98%. Like many of the companies on this list, NTAP had a great earnings report in August. Shares soared 7% after reports of a $30 million revenue beat and $0.10 EPS beat.
On the heels of posting great numbers, NTAP also provided optimistic estimates for the future. This helped the stock rise 4% more. The great price trend continued with another 9% gain on August 18th.
- Williams Companies WMB: 41.40%
Williams primary function is to take the natural gas, NGLs, and olefins markets and connect them to resource plays across North America. The company does energy infrastructure and is segmented into several different businesses.
The Williams Partners segment is a master limited partnership with assets in gathering, production and transportation. They have many pipelines and midstream projects in natural gas, NGLs, and olefins. Williams NGL & Petchem Services includes liquid extraction and propane dehyrdogenation. The final segment is called other and deals with a construction company and corporate.
WMB has been able to grow by 41.40% throughout the summer months. News of demand for the selling of their unit in Canada propelled shares by 5.6% on July 14th.
Later, an announcement of a dividend cut to focus on a pipeline operation helped the stock up another 4.1%. The price momentum continued when rumors of an acquisition by Enterprise Products rewarded shareholders with an over 6% increase in share price.
- Symantec SYMC: 42.03%
Symantec is a bodyguard to the internet. They have a massive database that they use to identify and extinguish threats from servers, mobile devices, and endpoints. SYMC supports customers with their global security centers and personalized service from cyberspace security experts.
Moving forward, Symantec completed the sale of their Veritas business to focus on costs and favorable capital allocation for shareholders. The deal to break apart from Veritas’ information management business netted the company over $6 billion in cash.
SYMC has returned an impressive 42.03% performance for shareholders this quarter. A new CEO helped buoy the stock 4.5% in part because of the perceived faults of previous management.
The company was then able to capitalize on great quarterly results to careen the stock up 6%. Symantec was able to outperform expectations on both revenue and earnings per share. The stock is now reinforced by positive outlooks from Citigroup, Morgan Stanley and Goldman Sachs.
- Seagate Technology STX: 55.96%
Seagate has a vast portfolio of products to serve the memory storage market. They sell HDDs (hard drives), SSDs (solid state drives), SSHD (solid state hybrid drives) and more. Not only do these products end up as external storage devices, but they also are found to store memory in DVRs and surveillance systems.
Much of their revenue comes from purchase agreements with OEMs (original equipment manufacturers), a full 70%. The rest of the revenue is generated through distributors at 16% and through the retail channel at 14%. Over 54% of STX’s revenue comes from Asia.
With a great recent surge, Seagate share price has compounded by 55.96% over the past three months. The company had a great Q4 report, where they beat revenue estimates by $20 million and EPS estimates by $0.09. This helped push the stock 5% in one day and see further gains later on.
It was actually the anticipation of a great earnings report before the actual release that sent the stock flying above double digits on multiple days. An announcement of a significant 14% reduction in workforce prompted a Morgan Stanley upgrade and was another catalyst sending shares up.
- Chesapeake Energy CHK: 72.40%
Chesapeake produces natural gas and (NGL) oil and natural gas liquids. As the United State’s second largest producer, CHK has wide range of assets to serve the industry. They have positions in the booming Eagle Ford Shale among many of their widespread geographical areas.
For the upcoming fiscal year, the company is ramping down the number of rigs they will operate compared to 2015. This will assist in their goal of increasing margins and liquidity. To additionally raise the value of existing assets, CHK will add crews specializing in completion.
This past summer has been characterized by a wide range of volatility in Chesapeake’s stock. Shareholders are particularly happy by recent developments leading up to a 72.40% increase in this short amount of time.
News of CHK leaving the Barnett shale propelled the stock 5.2% on August 10th. A subsequent plan for a $1 billion loan to buy senior notes helped the stock climb some more, resulting in a 16% increase over two days.
The company exploded up 13.5% on Thursday after a successful company presentation at the Barclays CEO Energy Power Conference signaled optimism surrounding the stock’s financials.
Of all of the companies on this list, Best Buy (BBY) features the most attractive valuations and stout financial condition to continue its hot streak into the foreseeable future.
Best Buy’s low price to earnings ratio (P/E) of 14.4 and high dividend yield of 3.88% coupled with a Value Trap Indicator score of 214 make it a Strong Buy at current price point.
Another company on this list with great financials is Micron Technology (MU). It has a great combination of low P/E at 6.8, low price to book ratio (P/B) at 1.5, and absurdly low price to sales (P/S) at 0.3. That low of P/S tells us the company is generating plenty of revenue and is a steal at current prices.
Since the Value Trap Indicator filters out stocks that don’t pay a dividend, MU scores a 343 which is just out of reach of “buy” territory. However, if you are an investor that doesn’t seek dividends, MU scores a VTI of 109 (Strong Buy) if you exclude the dividend category.
To download a spreadsheet with the Value Trap Indicator scores of every company on this list, subscribe to the author’s email list.
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