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Investors Business Daily
Investors Business Daily
Business
MATT KRANTZ

10 Stocks Turned $10,000 Into $12,505 While Others Lost Big Money

What's better than getting a 25% gain in a month on S&P 500 stocks? Getting it in the same month everyone else is down 7%.

And that's exactly what happened for investors with the top 10 S&P 500 stocks in January, including energy firms from Halliburton to Schlumberger and Occidental Petroleum, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.

Had you spread $10,000 evenly across the top 10 S&P 500 stocks of the month, you'd have $12,555 now. That's not a repeatable strategy. But had you simply hit the top S&P 500 stock of the month, Halliburton, your $10,000 would be worth even more: $13,712.29.

Not bad for an ugly month for most investors.

Energy Ruled S&P 500 In January

January holds a special place in investors' hearts. And it's not due to particular strength: the S&P 500 usually only inches up 1% during the month.

More importantly, though, a strong January usually foretells a strong rest of the year, with nearly 85% accuracy, the Stock Trader's Almanac says. And unfortunately in 2022, the opposite is also usually true.

"As the S&P 500 goes in January, so goes the year," said Stock Trader's Almanac.

And there's no question where money was made in the rough month for the S&P 500: Energy. All 10 of the top S&P 500 stocks hailed from that one sector. And the monthly gains are giant — up to triple what the S&P 500 typically returns in an entire year.

"At current levels, crude is priced in line or even cheap (compared) to prior normal-to-peak levels," said Nicholas Colas of DataTrek Research. "We continue to believe that oil prices can trend higher and still like energy stocks here.

A Tough Month For The These Stocks

Scoring gains this January is no small feat. Talk about a rough month for the S&P 500. January didn't pan out how many would have liked.

The index threatened a correction all month, falling nearly 10% from its all-time closing high of 4,796.6. Investors lost $5.4 trillion in paper wealth in January alone, says Wilshire Associates.

But the pain is even more widespread than it appears. Ten of the 11 S&P 500 sectors, other than energy, dropped in the month. The Consumer Discretionary Select Sector SPDR ETF, which contains Tesla, plunged the most in the month: 13%.

And there weren't many places to hide in the S&P 500, either. Three-quarters of the stocks in the S&P, or 359, dropped during the month. And of those, half dropped by 10% or more. And that's just within the S&P 500. Smaller stocks fared worse, still.

But you could find S&P 500 winners if you looked in the right places.

Huge Gains By S&P 500 Energy Stocks

Spotting massive gains in S&P 500 energy stocks isn't all that surprising. Many are on the verge of reporting solid profits — thanks to swelling oil prices.

The price of light crude oil is up nearly 80% from its 52-week low price on the Nymex. And much of that's flowing straight to the bottom line of energy companies. Take Halliburton for instance. The Houston-based oil and gas refiner's shares are already up more than 37% this year.

And profit is to follow. Analysts think Halliburton's adjusted profit this year will jump more than 65%. Compare that with the seemingly tiny 9.5% profit rise analysts see coming this year in the entire S&P 500, says John Butters of FactSet. Energy companies, as a group, are expected to put up 36% higher profit in 2022 — more than any other.

So, don't get discouraged by a tough S&P 500. Keep your watchlist close, remember your buy rules and listen to the market.

Best Stocks In January 2022

How much $1,000 invested equally in each one in the month would be worth. 

Company Symbol January % gain Sector $1,000 invested in January worth now
Halliburton 37.1% Energy $1,371.23
Schlumberger 32.5 Energy 1,324.87
Occidental Petroleum 29.6 Energy 1,295.96
ConocoPhillips 23.6 Energy 1,236.08
EOG Resources 23.5 Energy 1,234.94
APA 23.4 Energy 1,233.54
Hess 22.9 Energy 1,229.23
Exxon Mobil 22.8 Energy 1,227.65
Marathon Oil 20.8 Energy 1,208.28
Diamondback Energy 19.4 Energy 1,193.51
Total value now of $10,000 invested in all 10 for the month $12,555.31
S&P 500  $9,300
 Sources: IBD, S&P Global Market Intelligence

Follow Matt Krantz on Twitter @mattkrantz

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