S&P 500 Wins Big in First Quarter: Will It Continue?
The first quarter of 2012 is now behind us, and quite a quarter it was. In fact, the S&P 500 had its biggest first-quarter advance in 14 years. Stronger employment and consumer confidence were no doubt a big part of the stock market's success. But will it continue through 2012?
The S&P 500 finished the quarter up 12%, while the Nasdaq surged 19% over the quarter (Nasdaq's biggest increase since 1991). Measures of consumer confidence are near one-year highs, according to Bloomberg. Jobless claims are also near four-year lows.
Analysts, as usual, have different interpretations of the performance going forward. "The best of 2012 is probably behind us," Alan Brown, chief investment officer at Schroders told Bloomberg. "We've had a very substantial rally. I'm not sure where the fresh round of good news comes from that we haven't already discounted in today's prices. I'm rather more cautious at the present time."
On the other hand, David Kelly, chief market strategist at JPMorgan Funds disagrees. "There's no reason to avoid equities just because they've gone up a lot ... People are less fearful of a global financial meltdown emanating from Europe. If you look at valuations and the potential for economic growth, those things tell me the market should have room to move higher over the next few years."
Business section: Investing ideas
Do you think the economy (and the stock market) have nowhere to go but up? Or are you cautious knowing the market hardly ever moves in just one direction?
For a closer look at names that may be poised to outperform, we ran a screen on the best performing names in the S&P 500, rallying 20% above their 200-day moving averages and above their 20-day and 50-day moving averages as well.
We then screened for those that short-sellers expect to continue outperforming, with significantly decreasing shares shorted month-over-month.
Do you think these names are poised to continue moving higher?
Use this list as a starting point for your own analysis. (Click here to access free, interactive tools to analyze these ideas.)
1. Akamai Technologies (NAS: AKAM) : Provides services for accelerating and improving the delivery of content and applications over the Internet in the United States and internationally. The stock is currently rallying 0.00% above its 20-day moving average, 2.97% above its 50-day MA, and 27.68% above its 200-day MA. Shares shorted have decreased from 7.70M to 4.86M over the last month, a decrease which represents about 1.65% of the company's float of 172.46M shares
2. Crown Castle International (NYS: CCI) : Operates, and leases towers and other wireless infrastructure primarily in the United States and Australia. The stock is currently rallying 0.31% above its 20-day moving average, 4.69% above its 50-day MA, and 20.07% above its 200-day MA. Shares shorted have decreased from 7.16M to 3.63M over the last month, a decrease which represents about 1.42% of the company's float of 249.41M shares
3. Capital One Financial (NYS: COF) : Operates as the bank holding company for the Capital One Bank (USA), National Association and Capital One, National Association, which provide various financial products and services in the United States, Canada, and the United Kingdom. The stock is currently rallying 5.27% above its 20-day moving average, 11.65% above its 50-day MA, and 21.02% above its 200-day MA. Shares shorted have decreased from 27.10M to 7.62M over the last month, a decrease which represents about 4.33% of the company's float of 450.31M shares
4. EMC (NYS: EMC) : Develops, delivers, and supports the information and virtual infrastructure technologies and solutions. The stock is currently rallying 3.18% above its 20-day moving average, 9.27% above its 50-day MA, and 21.95% above its 200-day MA. Shares shorted have decreased from 130.90M to 100.41M over the last month, a decrease which represents about 1.49% of the company's float of 2.05B shares
5. Whirlpool (NYS: WHR) : Engages in the manufacture and marketing of home appliances worldwide. The stock is currently rallying 0.93% above its 20-day moving average, 10.21% above its 50-day MA, and 26.95% above its 200-day MA. Shares shorted have decreased from 8.17M to 6.99M over the last month, a decrease which represents about 1.55% of the company's float of 75.94M shares
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Alexander Crawford does not own any of the shares mentioned above. Short data sourced from Yahoo! Finance.
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