Wall Street just completed one of the worst quarters in its history. First-quarter 2020 will live in infamy as the quarter that every market participant wants to forget. In contrast, the prior-year quarter witnessed the best performance in three decades.
However, it is to be noted that this disappointing performance is not due to any economic, financial or geopolitical factors but instead a health hazard — the coronavirus pandemic — decimated an otherwise booming U.S. stock market.
Wall Street's Worst-Ever First Quarter
The three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — plunged 23.2%, 20% and 14.2%, respectively, in first-quarter 2020. This was the worst ever first quarter performance of both the Dow and the S&P 500.
Notably, the blue-chip index registered its worst ever quarterly performance since fourth-quarter 1987. For the benchmark index, last quarter was the worst performing one since fourth-quarter 2008. Meanwhile, the tech-heavy Nasdaq recorded biggest quarterly losses since the fourth quarter of 2018.
Moreover, in March alone, the Dow, the S&P 500 and the Nasdaq Composite tumbled 13.7%, 12.5% and 10.1%, respectively. All three major indexes posted worst monthly performance since 2008. Further, for the first time in more than decade, the broad-market S&P 500 index entered the negative territory in each of the first three months of a calendar year.
30 Stocks of the S&P 500 Index Gain in First Quarter
Some of the stocks, however, have remained immune to the market bloodbath. A closer look at the benchmark index paints a different picture. A portfolio of 30 stocks has in fact rallied in the first quarter defying the panoptic impact of coronavirus on the economy and financial markets.
Nevertheless, market is likely to remain extremely choppy in the next few weeks. This can be inferred from two things. First, President Donald Trump urged U.S. citizens to prepare to face a “very, very painful two weeks.” White House officials are projecting more than 100,000 deaths owing to coronavirus infection. Second, the COBE VIX — the best fear-gauge of Wall Street — is currently at 53.54, significantly above its historic average range of 20 to 25.
However, there is some good news as well. Per the Conference Board, the U.S. consumer confidence in March came in at 120. The data was lower than the February's revised reading of 132.6 but exceeded the consensus estimate of 115. Moreover, a measure of business conditions in the Chicago region declined to 47.8 in March from 49.0 in the prior month. However, the data was better than the consensus estimate of 40.
Additionally, the U.S. government and the Fed has already decided to provide fiscal and monetary stimulus worth $6 - $7 trillion. Besides the United States, internationally another $5 trillion of stimulus is anticipated to be generated in the next few weeks. All these positives will encourage long term investors to buy good stocks at attractive valuation at this stage.
Our Top Picks
We narrowed down our search to six S&P 500 stocks that have generated double-digit return in first-quarter 2020 with a favorable Zacks Rank and strong growth potential. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our six picks year to date.
Regeneron Pharmaceuticals Inc. (REGN - Free Report) is a biopharmaceutical company focused on the discovery, development and commercialization of treatments targeting serious medical conditions. The Zacks Rank #1 company has an expected earnings growth rate of 16.2% for the current year. The Zacks Consensus Estimate for current year earnings has improved by 6% over the past 60 days. The stock price has rallied 30.1% year to date.
Citrix Systems Inc. (CTXS - Free Report) is a leading provider of virtualization, networking and cloud computing solutions to more than 400,000 organizations worldwide. The Zacks Rank #2 company has a negative expected earnings growth for the current year but next year's growth rate is estimated at 15.2%. The Zacks Consensus Estimate for next year earnings has improved by 0.2% over the past 60 days. The stock price has jumped 27.7% year to date.
Netflix Inc. (NFLX - Free Report) offers TV series, documentaries and feature films across various genres and languages. The company provides members the ability to receive streaming content through a host of Internet-connected screens, including TVs, digital video players, television set-top boxes and mobile devices The Zacks Rank #2 company has an expected earnings growth rate of 47% for the current year. The Zacks Consensus Estimate for current year earnings has improved by 0.5% over the past 60 days. The stock price has climbed 16.1% year to date.
The Clorox Co. (CLX - Free Report) manufactures and markets consumer and professional products worldwide. It operates through four segments: Cleaning, Household, Lifestyle and International. The Zacks Rank #1 company has an expected earnings growth rate of 1.6% for the current year. The Zacks Consensus Estimate for current year earnings has improved by 4.6% over the past 60 days. The stock price has gained 12.9% year to date.
NVIDIA Corp. (NVDA - Free Report) offers graphics chip processors and related software for a wide range of visual computing platforms. It operates in two segments, GPU and Tegra Processor. The Zacks Rank #2 company has an expected earnings growth rate of 32.1% for the current year (ending January 2021). The Zacks Consensus Estimate for current year earnings has improved by 8.1% over the past 60 days. The stock price has appreciated 12% year to date.
SBA Communications Corp. (SBAC - Free Report) is a leading independent owner and operator of wireless communications infrastructure in the North, Central and South America. The Zacks Rank #2 company has an expected earnings growth rate of 10.4% for the current year. The Zacks Consensus Estimate for current year earnings has improved by 1.4% over the past 60 days. The stock price has advanced 12% year to date.
Today's Best Stocks from Zacks
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