Many investors in tech and S&P 500 stocks are struggling this year so far. But not all.
If you invested $10,000 in January in the top-performing stock in the S&P 500 at the time and reinvested that in each month's top performer, including Super Micro Computer (SMCI) in February, you'd have $20,195 now, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
↑ X NOW PLAYING Beating The Market: How To Find Outperforming StocksThat's an impressive two-month gain of 101%. It's quite a feat given the S&P itself is down a disappointing 0.3% so far this year. The same $10,000 invested in the S&P 500 would be worth just $9,970 now. That's a loss of $30. The S&P 500 sank 3% in February, erasing its 2.7% rise in January.
Hindsight is 20-20. And, clearly, few if any investors could have picked the top stock in each of the past two months, as it's not a repeatable strategy. But the staggering numbers this year remind investors amazing gains can be scooped up by diligent investors who keep buy lists handy for leaders even when the S&P 500 starts to fade.
In fact, following a month of losses, the S&P offered many ways to make money. More than 42% of the stocks in the S&P 500 rose during February. And of those, four stocks jumped more than 17% in just one month.
The S&P 500 itself was so weak in February that competition to be No. 1 was easy. But better-than-expected business results from Super Micro Computer announced in February gave investors confidence about future growth. The company's GAAP profit in the fourth quarter topped estimates by 2%. More importantly, the AI computing firm met a financial report filing deadline to avoid its stock from being delisted.
Now analysts think the company's profit will rise more than 19% this year and 37% next year. Super Micro Computer now has an RS Rating of 72. The EPS Rating, though, is better at 94.
The rest of the top 10 S&P 500 stocks in the second month of the year were a motley crew of mostly beat-up value stocks. Ailing legacy computer chipmaker Intel (INTC) rose 18.8% in the month. And CVS Health (CVS), one of the top S&P 500 stocks this year, gained 14.2%.
The big question, though, is: Will the S&P 500's winning streak continue in March? Historically, the odds look decent.
March is the fifth-best month for the S&P going back to 1950, says the "Stock Trader's Almanac." The S&P 500 rises 0.4% in March on average. And it rose nearly 66% of the time. Keep in mind, though, March sell-offs are common late in the month in recent history.
This year is a little different with the S&P 500 starting off cold. Also tariffs are rising along with layoffs. But following a disappointing January and February, investors would welcome some relief.
| Month | Top S&P 500 stock | Symbol | Monthly gain | Sector | S&P 500 monthly ch. | Starting balance | Cumulative value of $10,000 investment in January reinvested in best stock each month |
|---|---|---|---|---|---|---|---|
| January | Constellation Energy | CEG | 34.1% | Utilities | 2.7% | $10,000 | $13,410 |
| February | Super Micro Computer | SMCI | 50.6% | Information Technology | -3.0% | $13,410 | $20,195 |
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