10 stock winners, 10 losers in the first half of 2016

The S&P 500 Index SPX, +0.19% of the largest U.S. stocks rose 2.7% in the first half of 2016, led by energy, telecommunications and utility companies.
The benchmark stock-market index is on track to post its eighth consecutive annual gain. The S&P 500 eked out a 1.4% increase for 2015. With dividends reinvested, the index advanced 3.8% in the first six months of 2016.

FactSet

Sector performance this year has varied widely:

S&P 500 sector	Total return - 2016	Total return - 2015
Telecommunications	25%	3%
Utilities	23%	-5%
Energy	16%	-21%
Consumer Staples	10%	7%
Materials	7%	-8%
Industrials	6%	-3%
Consumer Discretionary	1%	10%
Health Care	0%	7%
Information Technology	0%	6%
Financials	-3%	-2%
Source: FactSet

Investor demand for telecommunications and utility stocks can be explained by one thing: yield hunger. In 2015, there was fear that the Federal Reserve would steadily increase the federal funds rate, which would hurt market prices of income-producing securities. But that hasn’t happened. The Fed made only one move, in December, raising the federal funds rate to a range of 0.25% from 0.50%, where it has stayed since. Those are still historically low rates, and the Federal Open Market Committee has been softening its stance on further rate increases.
Meanwhile, the strength of the dollar and uncertainty in international markets has made investment-grade bond yields unattractive. So if income is your main objective, you might ignore the gloom-and-doom warnings and buy dividend stocks or REITs, but be sure to consider how likely a company is to maintain or raise its dividend before jumping in.
The S&P 500 energy sector has returned 16% this year, as the price of West Texas crude oil has risen 30%. But it’s been a rough ride, as you can see in this chart:

FactSet

Mid-year winners

Here are the 10 S&P 500 stocks with the biggest total returns in the first half of 2016:

Company	Ticker	Industry	Total return - first half of 2016	Total return - 2015	Total return - 3 years
Newmont Mining Corp.	NEM, +3.12%	Precious Metals	118%	-4%	35%
Oneok Inc.	OKE, +0.25%	Oil and Gas Pipelines	101%	-47%	53%
Southwestern Energy Co.	SWN, +3.42%	Oil and Gas Production	77%	-74%	-66%
Range Resources Corp.	RRC, +3.11%	Oil and Gas Production	75%	-54%	-44%
Freeport-McMo-Ran Inc.	FCX, +1.89%	Precious Metals	65%	-70%	-56%
Spectra Energy Corp.	SE, +0.14%	Oil and Gas Pipelines	57%	-31%	21%
Iron Mountain Inc.	IRM, +0.28%	Real Estate Investment Trusts	52%	-26%	96%
EQT Corp.	EQT, +2.45%	Oil and Gas Production	49%	-31%	-2%
Digital Realty Trust Inc.	DLR, +0.01%	Real Estate Investment Trusts	47%	20%	109%
Murphy Oil Corp.	MUR, +2.87%	Oil and Gas Production	46%	-54%	-33%
Source: FactSet

Here’s a summary of analysts’ opinions of first-half winners:

Company	Ticker	Share ‘buy’ ratings	Closing price - June 30	Consensus price target	Implied 12-month upside potential
Newmont Mining Corp.	NEM, +3.12%	43%	$39.12	$38.69	-1%
Oneok Inc.	OKE, +0.25%	22%	$47.45	$39.67	-16%
Southwestern Energy Co.	SWN, +3.42%	10%	$12.58	$11.51	-8%
Range Resources Corp.	RRC, +3.11%	51%	$43.14	$46.65	8%
Freeport-McMo-Ran Inc.	FCX, +1.89%	19%	$11.14	$10.46	-6%
Spectra Energy Corp.	SE, +0.14%	37%	$36.63	$33.56	-8%
Iron Mountain Inc.	IRM, +0.28%	43%	$39.83	$38.50	-3%
EQT Corp.	EQT, +2.45%	59%	$77.43	$82.11	6%
Digital Realty Trust Inc.	DLR, +0.01%	56%	$108.99	$97.60	-10%
Murphy Oil Corp.	MUR, +2.87%	0%	$31.75	$28.39	-11%
Source: FactSet

Mid-year losers

Here are the 10 S&P 500 stocks with the lowest total returns in the first half of 2016:

Company	Ticker	Industry	Total return - first half of 2016	Total return - 2015	Total return - 3 years
Endo International PLC	ENDP, +8.92%	Pharmaceuticals	-75%	-15%	-58%
CF Industries Holdings Inc.	CF, +0.50%	Chemicals: Agricultural	-40%	-24%	-25%
Alexion Pharmaceuticals Inc.	ALXN, +1.57%	Biotechnology	-39%	3%	27%
Perrigo Co.	PRGO, +0.50%	Pharmaceuticals	-37%	-13%	-24%
Regeneron Pharmaceuticals Inc.	REGN, +2.65%	Pharmaceuticals	-36%	32%	55%
Signet Jewelers Ltd.	SIG, +2.11%	Specialty Store	-33%	-5%	25%
Royal Caribbean Cruises Inc.	RCL, +2.92%	Hotels/ Resorts/ Cruise lines	-33%	25%	113%
American Airlines Group Inc.	AAL, +3.60%	Airlines	-33%	-20%	N/A
Vertex Pharmaceuticals Inc.	VRTX, +2.00%	Pharmaceuticals	-32%	6%	7%
BorgWarner Inc.	BWA, +2.61%	Auto Parts: OEM	-31%	-21%	-29%
Source: FactSet

Here’s a summary of analysts’ opinions of the losers:

Company	Ticker	Share ‘buy’ ratings	Closing price - June 30	Consensus price target	Implied 12-month upside potential
Endo International PLC	ENDP, +8.92%	42%	$15.59	$30.05	93%
CF Industries Holdings Inc.	CF, +0.50%	40%	$24.10	$31.91	32%
Alexion Pharmaceuticals Inc.	ALXN, +1.57%	68%	$116.76	$186.26	60%
Perrigo Co.	PRGO, +0.50%	33%	$90.67	$118.20	30%
Regeneron Pharmaceuticals Inc.	REGN, +2.65%	52%	$349.23	$471.43	35%
Signet Jewelers Ltd.	SIG, +2.11%	89%	$82.41	$131.42	59%
Royal Caribbean Cruises Inc.	RCL, +2.92%	92%	$67.15	$96.95	44%
American Airlines Group Inc.	AAL, +3.60%	75%	$28.31	$43.50	54%
Vertex Pharmaceuticals Inc.	VRTX, +2.00%	64%	$86.02	$110.36	28%
BorgWarner Inc.	BWA, +2.61%	57%	$29.52	$40.56	37%
Source: FactSet

Analysts expect plenty of these companies to post strong recoveries over the next 12 months. But if you are a long-term investor, rather than just jumping into one of these stocks, it is best to do your own research and form an opinion on how likely the company is to increase its sales and profits for years to come.
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