The Best and Worst of the S&P 500 in 2010

As an investor with contrarian tendencies I am always scanning sectors and stocks that may have underperformed in the past looking for solid values. With this in mind I present the best and worst of the S&P 500 from 2010.

First let us examine sector performance. MarketWatch has an article up from earlier in the month that suggests a momentum strategy for playing S&P 500 sectors. It works like this; buy the top three sectors from the prior year and hold for one year. The next year do the same. Since 1990 this strategy would have returned an average of 10.3% versus 8.6% for the entire S&P 500 index. See table to the right. For those momentum traders, this may be a strategy worth considering. As someone with a longer-term outlook than one year I prefer to look at the under-performing sectors for value. See the following table for the price performance of all ten S&P 500 sectors in 2010. Those shaded in green outperformed the total index and those shaded red underperformed the total index.

Now we shall take a look at some individual names. The first table is the top 20 price performance companies in the S&P 500 from 2010 and the second table is the bottom 20. For 2010 price performance on all 500 S&P 500 constituents see the following excel file.

THE TOP TWENTY

THE BOTTOM TWENTY

For those pursuing a momentum strategy the first list may present opportunity for 2011 while those value/contrarian investors like myself may want to focus on the second list.

Happy New Years!

S&P 500 Sector Winners and Losers

since 1990 avg. annual
change
(%)
standard
deviation
return/
risk ratio
frequency
of s&p 500
outperformance
S&P 500 8.6 19.0 0.45 NA
3  Sector
Losers
8.9 20.7 0.43 40%
3 Sector Winners 10.3 22.1 0.47 70%

Source: Standard & Poor’s Equity Research (as of 12/08/2010)

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One response to “The Best and Worst of the S&P 500 in 2010

  1. Pingback: Revisiting the Best and Worst of the S&P 500 in 2010 « Seeking Delta

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