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2019's biggest winners were 2018's biggest losers

Scott Gamm
·Reporter
Updated

There’s an interesting characteristic that the best performing stocks of 2019 share: They were smoked in December 2018.

What goes down must go up? Apparently.

This is the focus of a new research note released by DataTrek Research co-founder Nick Colas, a veteran Wall Street strategist.

Here are the best performing S&P 500 (^GSPC) stocks so far in 2019:

  • Xerox (XRX): +54%; December 2018’s return: -37.7%

  • Delphi Technology (DLPH): 47%; December 2018’s return: -16.2%

  • HanesBrands (HBI): +46%; December 2018’s return: -21.2%

  • Mattel (MAT): +45%; December 2018’s return: -28.2%

  • Xilinx (XLNX): +41%; December 2018’s return: -7.9%

  • Chipotle (CMG): +41.5%; December 2018’s return: -8.8%

  • Hess (HES): +41%; December 2018’s return: -24.8%

Notice a pattern?

Specialist Matthew Grenier works on the floor of the New York Stock Exchange, Tuesday, March 5, 2019. Stocks are opening slightly lower on Wall Street led by losses in banks and technology companies. (AP Photo/Richard Drew)
Specialist Matthew Grenier works on the floor of the New York Stock Exchange, Tuesday, March 5, 2019. Stocks are opening slightly lower on Wall Street led by losses in banks and technology companies. (AP Photo/Richard Drew)

“Many of 2019’s biggest winners to-date are simply those names that got really clobbered in December 2018,” Colas wrote. “That’s how you end up with Xerox as the S&P’s top stock for the year. This is a name that hasn’t gone anywhere for half a decade, after all.”

What about the worst performing stocks of 2018? Have they done well so 2019?

The answer is yes — and here are the names:

  • General Electric (GE): +27%

  • Mohawk Industries (MHK): +11%

  • Invesco (IVZ): +13%

  • Western Digital (WDC): +26%

  • L Brands (LB): +3%

“I think the central lesson here is that chasing year-to-date winners is going to be a losing strategy from here,” Colas told Yahoo Finance. “Lots of investors chase momentum, either as a conscious strategy or inadvertently by looking at what’s worked lately.”

Just because a stock has worked over a two-month period, doesn’t mean the trend will continue, he added.

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Scott Gamm is a reporter at Yahoo Finance. Follow him on Twitter @ScottGamm.

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