The S&P 500's big plunge in August caught most investors off guard. So it's quite a win if you scooped up the handful of gainers in the tough month.
Eight stocks in the S&P 500 — including Eli Lilly, Arista Networks and Global Payments — jumped 8% or more during the historically difficult month of August so far, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith. That's a solid gain when the S&P 500 itself is down more than 4% this month.
It's a stock picker's kind of month — and finding winners is especially tough. More than 85% of the stocks in the S&P 500 are down this August so far. Stocks are struggling as investors can score 5% or more just holding cash.
"Stocks are going to have a hard time if real yields continue to rally," said Edward Moya of Oanda. "Not only are surging borrowing costs bad for the economy, it is also providing some extremely alternatives for short-term investments."
Finding Winners In The S&P 500's Wreckage
The S&P 500's seemingly small 4% drop during the month hides some real pain. Many of the biggest losses center around giant megacap tech stocks that surged earlier in the year.
And those drops are inflicting sizable losses. Apple alone, the most valuable stock in the S&P 500, is down more than 10% this month. That lands this critical stock in a correction. And it also erases a mind-boggling $360 billion in market value — in just one month. And Apple's pain is far from unique. Most of the so-called Magnificent Seven stocks are down this month so far.
That's why finding winners this month is all the more impressive.
Eli Lilly: Biggest S&P 500 Winner In A Bad Month
Talk about a solid month. Shares of Eli Lilly are up 21% so far in August. That makes the health care giant the No. 1 performer in the S&P 500 this month. In fact, Eli Lilly stock's gain this month outstrips the S&P 500's 14.9% gain for the entire year.
And that's just the tip of what's been a stellar 2023 for Eli Lilly stock so far. It's up more than 50% just this year. Investors are bullish on the company's pipeline, including neurological treatments. The company on Aug. 8 reported a quarterly profit of $2.11 a share, beating forecasts by nearly 6%. And for the year, the company is on pace to make $9.50 a share, up nearly 20% from the prior year.
August hasn't been a great month for the giant tech stocks. But computer networking firm Arista Networks is the only S&P 500 stock in the information-technology sector that's up 8% or more in the month. Shares of Arista are up 16.4% during the month. Again, there's a strong fundamental story. The company on July 31 reported a nearly 10% higher-than-expected quarterly profit of $1.58 a share. And for the year, analysts see profit rising nearly 35%. That's miles ahead of Apple's expected 1% drop in earnings this fiscal year.
August isn't over yet. But it has already reminded investors why it's a tough month — unless you pick the right S&P 500 stocks.
Top S&P 500 Stocks In August So Far
| Company | Symbol | August change | Sector |
|---|---|---|---|
| Eli Lilly | 21.0% | Health Care | |
| Arista Networks | 19.1 | Information Technology | |
| Regeneron | 13.8 | Health Care | |
| Global Payments | 12.1 | Financials | |
| Amgen | 11.3 | Health Care | |
| Constellation Energy | 9.8 | Utilities | |
| Jacobs Solutions | 8.6 | Industrials | |
| APA | 8.4 | Energy |
Sources: S&P Global Market Intelligence, IBD
Follow Matt Krantz on Twitter @mattkrantz
