If you're like most investors you assume AI giant Nvidia is the best stock of the year. But 2024's major champ isn't even in the S&P 500.
Four stocks in the broader S&P 1500 index, including ADMA Biologics, Lumen Technologies, Vistra and Powell Industries, are up more than 151% this year, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge. The S&P 1500 index not only tracks large caps in the S&P 500, but also small and midcaps.
A gain of 151% or more is key as it means these stocks are topping Nvidia's this year. What's more, with three of the year's top four major stocks not in the S&P 500, it's a reminder how some huge gains are possible if you go off the beaten path.
"If you're thinking about a portfolio that is benchmarked against the S&P 500 and is designed to outperform, it allows analysts to uncover ideas or names outside the index that are just better investments than maybe competitors within the index," Ann Holcomb, co-manager of the top-rated T. Rowe Price U.S. Equity Research Fund (PRCOX) told IBD.
Only Go Big And Miss Out
If you're only buying the megacap S&P 500 stocks, you're likely missing out on some of the biggest gains.
Six of the top 10 stocks in the S&P 1500 this year aren't in the S&P 500. And 16 of the top 20 aren't. And that includes the very best S&P 1500 stock this year. Take ADMA Biologics. Shares of the S&P 600 small-cap stock are up 345.1% this year alone.
The $4.6 billion market value company, working on treatments for infectious diseases, sports a perfect 99 RS Rating and 99 Composite Rating. And talk about off-the-hook growth forecasts. Analysts think the company's profit will jump 4,725% this year. That makes Nvidia's 2024 earnings growth forecast of 118% look lame.
Other Huge Winners This Year
And ADMA isn't the only midsize company schooling Nvidia. Lumen Technologies, a $6.8 billion market value high-speed networking firm, actually got removed from the S&P 500 last year.
But Lumen is making up for the indignity this year. Shares are up a blistering 268% this year so far. That's enough to give it a 99 RS Rating. But unlike ADMA, this isn't a growth story. Analysts think the company's profit will drop more than 250% this year.
Among the top S&P 500 stocks, utility Vistra dominates. The utility company is getting a lift from AI-generated demand for power. It's up nearly 260% this year, thanks largely to a huge rally in September.
So while few investors can beat the S&P 500, apparently some smaller stocks can.
Top S&P 1500 Stocks This Year
| Company | Ticker | Index | YTD ch. | Sector |
|---|---|---|---|---|
| ADMA Biologics | ADMA | S&P 600 | 345.1% | Health Care |
| Lumen Technologies | LUMN | S&P 600 | 268.0% | Communication Services |
| Vistra | VST | S&P 500 | 259.6% | Utilities |
| Powell Industries | POWL | S&P 600 | 176.3% | Industrials |
| Nvidia | NVDA | S&P 500 | 151.1% | Information Technology |
