Should Investors Look at These Stocks on a Pullback?
Producer, CNBC's "Squawk Box"
Since the Standard & Poor's 500 touched a multi-year high on April 2, the index is down about 3.8 percent. But as Street Signs host Brian Sullivan pointed out on Monday, stocks have had much steeper pullbacks in recent years.
For instance, the S&P 500 last year dropped 253 points, or 18 percent, from July 8 to October 3. And from April 30, 2010 to July 2, 2010, the S&P 500 fell 155 points, or 13 percent.
By pullback standards, however, the S&P 500’s recent slide —Wednesday’s gains aside— is small in comparison.
“I am more bullish than the market appears,” Alpesh Patel, director of Praefinium Partners, told CNBC.
He also pointed out, “Back to back gains in the S&P 500 in the first two months of the year have occurred in 24 of the last 66 years. The average gain during those 24 years was 19.4 percent, with not a single down year.”
Here’s another case for the bulls and the idea of long-term investing.
CNBC's Analytics team ran a screen for the top-performing S&P 500 stocks since April 30, 2010 — stocks that weathered the aforementioned pullbacks and many others since then.
Percent Changes From April 2010
|FOSL||Fossil Inc||135.63||248.1%||Consumer Discretionary|
|CMG||Chipotle Mexican Grill Inc||425.4||215.3%||Consumer Discretionary|
|PCLN||priceline.com Inc||750||186.2%||Consumer Discretionary|
|EP||El Paso Corp||29.88||146.9%||Energy|
|AAPL||Apple Inc||633.78||142.7%||Information Technology|
|BIIB||Biogen Idec Inc||126.65||137.7%||Health Care|
|DLTR||Dollar Tree Inc||94.24||132.8%||Consumer Discretionary|
|TDC||Teradata Corp||67.72||133.0%||Information Technology|
|SBUX||Starbucks Corp||57.725||122.2%||Consumer Discretionary|
|CF||CF Industries Holdings Inc||182.44||118.0%||Materials|
As expected, the list includes some highfliers including Priceline and Apple , and Chipotle.
But the list also includes such names as Dollar Tree and Starbucks that have shown stable growth trends.
So, should investors be looking at these types of names on a pullback?
“Granted they’ve been great over two years, if the macro picture really falls apart the exit could be very crowded,” Steve Massocca, senior vice president at Wedbush Securities, told Street Signs.
He believes dividend-paying companies are a better place to be. “There are over 650 U.S.-listed stocks that yield 5 percent or greater...You get paid to wait for the stock prices to rise.”
Massocca likes American Capital Agency in the mortgage REIT space — currently yielding 16.8 percent. He also likes Natural Resource Partners , a master limited partnership, which is currently yielding 9.4 percent.