A Review Of The 1st Half Reveals Plenty Of Great Stocks At Reasonable Prices

The market is off to a great start this year. A look below the surface reveals plenty of great stocks at reasonable prices.

First up is a snapshot of the S&P 500 year-to-date through June 30. This large-cap index is up 14.4% YTD - a very respectable start for any year, and especially one that is digging its way out of a large economic hole.

S&P 500 chart 6-30-2021

The rest of the charts and tables include mid- and small-caps along with their larger brethren. This gives us a much deeper perspective on the market. I will also drill down into the 15 sectors tracked by Zacks Investment Research.

The table below shows the wide disparity of returns among large, mid, and small cap stocks. An overweight allocation to small caps would have paid off nicely.

S&P 1500 performance 6-30-2021

This next table shows the returns for the 15 sectors. Energy was the clear leader, and Retail-Wholesale was strong as a result of strong consumer spending.

market performance by sector 6-30-2021

Next we see the top-performing stocks YTD. The Gamestop story is well known, and the rest of the list is dominated by energy companies. Wall Street has been warming up to Gamestop recently but it remains very overpriced.

Other stocks on this winner's list that are not overpriced, and have high scores from S&P Global for quality and growth include SM Energy, Apollo Medical, Joint Corp, and Timkensteel. (Always do your own due diligence before buying or selling any of the stocks mentioned in this article.)

Top Ten stocks 6-30-2021

Next up is a list of the ten worst performers YTD. The list is dominated by medical companies. But some of these stocks get high marks from S&P Global for quality and growth, such as Quidel, Pennant, Bottomline, and Endo. These names are worth a look.

Bottom Ten stocks 6-30-2021

The next series of charts highlights the top and bottom performers for each of the 15 Zacks sectors. I have ordered the tables from the strongest to weakest sectors. We begin with energy - the strongest of them all.

SM and CEIX have high scores from S&P Global. The rest of these names might be better left alone.

Energy sector winners & losers 6-30-2021

We covered GME earlier. SIG, ANF, CONN, KAR. and LL get good scores from S&P Global.

retail winners & losers 6-30-2021

In addition to TMST, VRTV, ZEUS, OLN also look promising, according to S&P Global. TG is still expensive but it scores well for quality and financial health. CLW is very cheap and scores well on quality and financial health.

materials winners & losers 6-30-2021

LPX and MTZ are loved by analysts and they both score very high on S&P Global metrics. GLT is cheap and deserves a closer look.

construction Winners & losers 6-30-2021

CUBI and GEO stand out here with high marks for valuation and quality.

financials winners & losers 6-30-2021

Analysts love RILY and KFY but their S&P Global scores are middling. 

business services winners & losers 6-30-2021

DDD is expensive, TDC is still cheap, DFIN gets high marks across the board,  

tech winners & losers 6-30-2021

AMEH, JYNT, and QDEL deserve a closer look with their high S&P Global scores.

healthcare Winners & losers 6-30-2021

F, OSK and GT still look cheap, with good scores to boot. 

autos winners & losers 6-30-2021

As we wind down into the weakest sectors, good stocks are harder to find. IIIN is the only name that looks good here, 

industrials winners & losers 6-30-2021

ARCB looks promising, with high scores from S&P Global and the analyst community. MRTN looks slightly undervalued but scores well for quality and growth.

transportation winners & losers 6-30-2021

MDP and COKE look like bargains with good scores. 

cons staples winners & losers 6-30-2021

VSTO still looks cheap and has good scores. AMCX should not be mistaken for AMC - the well-known Meme stock. AMCX is highly rated by analysts and S&P Global.

cons discretionary Winners & losers 6-30-2021

TXT and HII look good in here. The rest of this list should be avoided. 

aerospace Winners & losers 6-30-2021

At last we come to the bottom performing sector - Utilities. MYRG looks very good, with high marks in every category. The problem is that they don't pay a dividend. UGI looks good as well. And they do pay a dividend of 3%.

utilities Winners & losers 6-30-2021

Final thoughts. 

When you look at the market in a granular way as we did today, you begin to see patterns and trends that aren't visible on the surface. One way to use this information is to look at companies that have been beaten down in price but still have great potential. Buying high quality stocks with solid earnings growth and financial stability can pay off handsomely in the mid- to long-term.  

Disclaimer: This content is for educational purposes only, and ZenInvestor.org is not an investment advisory service, nor an investment advisor, nor does ZenInvestor.org provide personalized ...

more
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.