5 Stocks in S&P 500 ETF Defying Losing Streak Since 2011

The S&P 500 is caught in a vicious circle of uncertainty triggered by a hawkish Fed, sky-high inflation, the ongoing Russia-Ukraine war, and global growth worries. In fact, the S&P 500 has suffered the longest weekly losing streak since 2011. The benchmark is down 13.5% year to date. SPDR S&P 500 ETF Trust SPY, the proxy version of the S&P 500 Index, has plunged about 12.6%.

While most of the stocks in SPY’s portfolio are deep in red, a few have outperformed so far this year, with energy stocks being the biggest gainers. We have highlighted stocks from various corners of the market that have gained in double digits. These include Occidental Petroleum Corporation OXY, CF Industries CF, McKesson Corporation MCK, Archer Daniels Midland Company ADM and Lockheed Martin LMT. All these stocks have a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold).

Fed Chair Jerome Powell raised interest rates by 50 bps, pushing the benchmark above 0.75%. The hike marks the biggest interest-rate increase since 2000. With inflation running at a 40-year high of 8.5%, the central bank also signaled that it would keep hiking at the same pace over the next couple of meetings. Signals that the Fed will not consider a rate hike by 75 bps at a future meeting were welcomed by investors initially but evaporated later, on worries about the impact of the Fed’s moves on the broader economy (read: 4 ETFs to Ride on Fed's 50 Bps Rate Hike).

An increase in interest rates means higher loan rates for consumers and businesses, including mortgages, credit cards and auto loans. Additionally, supply chain issues stemming from the spike in COVID-19 cases in China and the ongoing war in Ukraine are weighing on investor sentiment.

Let’s take a closer look at the fundamentals of SPY.

SPY in Focus

SPDR S&P 500 ETF Trust holds 504 stocks in its basket, with each accounting for no more than 7% of assets. This suggests a nice balance across each security and prevents heavy concentration. The fund is widely spread across sectors with information technology, healthcare, consumer discretionary, financials and communication services accounting for a double-digit allocation each.

SPDR S&P 500 ETF Trust has AUM of $374.5 billion and charges 9 bps in fees per year. The product trades in a heavy volume of around 88.3 million shares a day on average, ensuring higher liquidity with a tight bid/ask spread, leading to lower trading costs for investors. SPY has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (see: all the Large Cap Blend ETFs here).

Below we have highlighted the above-mentioned five best-performing stocks in the ETF from different industries.

Best-Performing Stocks of SPY

Occidental Petroleum is an integrated oil and gas company, with significant exploration and production exposure. The stock has soared 124% so far this year and accounts for a 0.16% share in the ETF.

Occidental Petroleum has an estimated earnings growth rate of 34.6% for this year. It has a Zacks Rank #1 (Strong Buy) and VGM Score of B. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

CF Industries is one of the largest manufacturers and distributors of nitrogenous fertilizer and other nitrogen products globally. It makes up for a 0.06% share in the fund’s basket and has gained 41% so far this year.

CF Industries earnings are expected to grow a massive 291% this year. The stock carries a Zacks Rank #1 and has a VGM Score of A.

McKesson Corporation is a health care services and information technology company. The MCK stock has climbed 34.4% so far this year and accounts for 0.13% in the fund’s basket.

McKesson saw positive earnings estimates revision of 6 cents over the past 30 days for fiscal year (March 2023) and a Zacks Rank #3. It carries a top VGM Score of A.

Archer Daniels is one of the leading producers of food and beverage ingredients as well as goods made from various agricultural products. The stock has gained 32.8% so far this year and accounts for 0.14% in the fund’s basket (read: Food ETFs Getting Investors' Love Amid Shortage).

Archer Daniels is expected to see earnings growth of 15.4% for this year and has a Zacks Rank #1. It has a solid Momentum Score of B.

Lockheed Martin is the largest defense contractor in the world. Its main areas of focus are in defense, space, intelligence, homeland security and information technology, including cyber security.

Lockheed Martin jumped 26.4% and its earnings are expected to increase 18.6% for this year. The stock makes up for 0.31% of assets in SPY and has a Zacks Rank #3. Lockheed Martin has a VGM Score of B.

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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
Occidental Petroleum Corporation (OXY) : Free Stock Analysis Report
 
Archer Daniels Midland Company (ADM) : Free Stock Analysis Report
 
McKesson Corporation (MCK) : Free Stock Analysis Report
 
CF Industries Holdings, Inc. (CF) : Free Stock Analysis Report
 
SPDR S&P 500 ETF (SPY): ETF Research Reports
 
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